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


From   William Hauser <whauseriii@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: What is the effect of centering on marginal effects?
Date   Fri, 3 Aug 2012 08:13:16 -0400

Dear all,

I'm fairly confident that mean centering does nothing to resolve
collinearity.  I believe it does fool some of the diagnostic tools
though and that's probably why the belief that it somehow solves the
problem persists.  Mean centering simply shifts the collinearity onto
the intercept term.  Mean centering adds no new information to the
model and that's the problem - the data lack the necessary information
for the model to partial out the effects in a precise and stable
manner.  Perhaps this is effect is different for interaction terms,
but I fail to see how that's the case.

Collinearity means the independent effects of the collinear variables
cannot be precisely estimated.  The point of interaction terms is that
they be analyzed jointly anyway.  The use of the margins and
marginsplot commands accomplish this with such ease (and polish) that
I would heartily recommend their use.

Will
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