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Re: st: What is the effect of centering on marginal effects?


From   Richard Williams <richardwilliams.ndu@gmail.com>
To   statalist@hsphsun2.harvard.edu, statalist@hsphsun2.harvard.edu
Subject   Re: st: What is the effect of centering on marginal effects?
Date   Wed, 01 Aug 2012 15:16:25 -0500

At 12:50 PM 8/1/2012, David Hoaglin wrote:
Dear Alessandro,

Some of your statements are puzzling.

Centering predictor variables can have a substantial effect on
collinearity.  Belsley, Kuh, and Welsch (1980) discuss this and other
aspects of (multi)collinearity; see, for example, Section 3.4.

I am not sure why that is much of a concern though. Sure, if one variable is computed from another, there will tend to be collinearity, e.g. X will usually be correlated with X^2; femaleXses will tend to be correlated with female and ses. Further, centering continuous vars will tend to reduce collinearity. But, so what? Unless the software is having trouble converging to a solution, the collineairity doesn't really matter. Centering may make the results easier to interpret, but collinearity in and of itself in these situations usually doesn't create much grief.

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Richard Williams, Notre Dame Dept of Sociology
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