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st: Interaction model


From   Shikha Sinha <shikha.sinha414@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   st: Interaction model
Date   Wed, 8 Feb 2012 13:45:26 -0800

Hi All,

I want to examine if the effect of a program varies by gender, SES,
and immigration status of the individuals. Income, the outcome, is a
continuous variable. gender (male==1), SES (poor and rich==1) and
immigration status (yes==1) all are dummies. I can examine the
heterogeneous effect in the following different ways:

(a) income= b1*program + b2*rich + b3*immi + b4*male + b4*program*rich
+b5*program*male + b6*program*immi

or estimate separate equations

(b) income= b1*program + b2*rich + b3*immi + b4*male + b4*program*rich
     income= b1*program + b2*rich + b3*immi + b4*male +b5*program*male
     income= b1*program + b2*rich + b3*immi + b4*male + b6*program*immi

I want to know which is the correct model (a) vs (b)  to estimate the
heterogeneous effect and what is the difference between the two.

Thanks in advance for your help!

Shikha
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