Notice: On March 31, it was **announced** that Statalist is moving from an email list to a **forum**. The old list will shut down on April 23, and its replacement, **statalist.org** is already up and running.

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

From |
Christopher Baum <kit.baum@bc.edu> |

To |
"statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu> |

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

Date |
Thu, 2 Aug 2012 12:38:29 +0000 |

<> On Aug 2, 2012, at 2:33 AM, Alessandro wrote: > Centered and uncentered models are algebraically equivalent (see > Brambor et al, "Understanding Interaction Models: Improving Empirical > Analyses" 2006). The only difference is that, in an uncentered model, > the coefficient of b1 corresponds to the marginal effect of a one unit > change in X when the conditioning variable Z is zero, while the > corresponding coefficient on the centered model gives you the marginal > effect of a change in X when Z is at its mean. > > This means that centering variables will not reduce multicollinearity > on your model. I don't think this is quite true. See what happens to the VIF when the interacted variables are centered. Also note that the elasticity estimates change, and become very imprecise with centering. sysuse auto, clear qui reg price length weight c.length#c.weight estat vif margins, eyex(_all) // center from SSC (Jann) center price length weight qui reg c_price c_length c_weight c.c_length#c.c_weight estat vif margins, eyex(_all) Kit Kit Baum | Boston College Economics & DIW Berlin | http://ideas.repec.org/e/pba1.html An Introduction to Stata Programming | http://www.stata-press.com/books/isp.html An Introduction to Modern Econometrics Using Stata | http://www.stata-press.com/books/imeus.html * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: Re: st: What is the effect of centering on marginal effects?***From:*Alessandro Freire <alessandro.freire@gmail.com>

- Prev by Date:
**Re: st: Comparing coefficients across sub-samples** - Next by Date:
**Re: st: Stop Stata rounding up decimal places when import from Excel** - Previous by thread:
**Re: st: What is the effect of centering on marginal effects?** - Next by thread:
**Re: Re: st: What is the effect of centering on marginal effects?** - Index(es):