Bookmark and Share

Notice: On March 31, it was announced that Statalist is moving from an email list to a forum. The old list will shut down at the end of May, and its replacement, statalist.org is already up and running.


[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

st: Why to use and how to interpret interaction terms in nlogit?


From   Patricia Yu <pyu1@wisc.edu>
To   statalist@hsphsun2.harvard.edu
Subject   st: Why to use and how to interpret interaction terms in nlogit?
Date   Fri, 20 Jul 2012 16:15:59 -0400

Dear Statalist,

 

I learn the nested logit model by running –nlogit- with a travel dataset which could be obtained by typing the following in Stata:

 

. webuse travel

 

Tree structure for the nested logit model is below:

 

top ---------> bottom

 

 

In this data exercise example, 4 dummies describing choices/modes, respectively, are created: named <air>, <train>, <bus>, and <car>.

An interaction term of “choosing air” with “household income” is also created: named <air_inc>.

The result table of nlogit is presented as follows:

 

 

My questions are:

1.    Why 3 dummies, <air>, <train>, and <bus>, which are alternatives of choice, are put in the model as independent variables? How to explain the coefficients of these three dummies?

2.    Why the interaction term of “choosing air” with “household income” is created for the second equation (the equation of type)? How to explain its result?

 

Thank you very much in advance for helping me clarify these!

 

Thanks,

Patricia

 

-------------------------------------------------------------------------

PATRICIA YU

Dissertator in Higher Education

Department of Educational Leadership & Policy Analysis

School of Education

University of Wisconsin-Madison

(608) 698-8108

pyu1@wisc.edu

-------------------------------------------------------------------------

 



© Copyright 1996–2014 StataCorp LP   |   Terms of use   |   Privacy   |   Contact us   |   Site index