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 |
David Crow <david.crow@cide.edu> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: interpretation for negative and positive slope combination of interaction term |

Date |
Thu, 9 May 2013 13:36:58 -0500 |

Dear Nahla- You're on the right track, but not quite right. I find that it's helpful to think of the meaning of each coefficient. Let's boil your model down to just the two variables (Market Value, MV, and Overconfident Managers, OC), their interaction, and an intercept: y = B0 + B1*(MV) + B2*(OC) + B3*(MV*OC) + u and yhat = B0 + B1*(MV) + B2*(OC) + B3*(MV*OC) Since OC is an indicator variable (overconfident = 1), when OC=0--that is, for non-overconfident, or "realistic" managers", yhat is simply B0 + B1*(MV) and the effect of market value is given by B1. However, when OC=1--that is, for overconfident managers--yhat is B0+B1*MV+B2*OC+B3*MV*OC. Since OC=1, this simplifies to B0+B1*MV+B2+B3*MV and the effect of MV is given by B1+B2+B3 Your calculation (-0.0566241 + 0.0596146= 0.003) leaves out the term B2, the coefficient for OC. So, the correct slopes are: OC=0: -0.0566241 OC=1: -0.0566241 + -.1040174 + 0.0596146 = -.1010269. In this case, the effects of market value appear to attenuate the effects of overconfidence. Hope this helps. Best, David On Thu, May 9, 2013 at 8:20 AM, Nahla Betelmal <nahlaib@gmail.com> wrote: > > Dear Statalist, > > > As you can see below, I have a interaction term between OC (dummy =1 > for overconfidence) and MV (continuous variable for market value). The > interaction term is positive and significant. I want to calculate the > slope against MB for overconfident managers which should be the > coefficient of MV plus the coefficient of OC*MV. > I am confused how to get this figure because MV is negative and OC*MV > is positive. So, Should it be -0.0566241 + 0.0596146= 0.003? if this > is true how can I interpret how many times the effect of MV is larger > for overconfident managers?? 0.003/0.0566. > > I am really confused and I highly appreciate your help please > > > > > Linear regression Number of obs = 49 > F( 10, 38) = 3.23 > Prob > F = 0.0043 > R-squared = 0.4385 > Root MSE = .08529 > > ------------------------------------------------------------------------------ > | Robust > earnings managment| Coef. Std. Err. t P>|t| [95% > Conf. Interval] > -------------+---------------------------------------------------------------- > var1 | .0081153 .0058432 1.39 0.173 -.0037137 .0199443 > MV | -.0566241 .0353602 -1.60 0.118 -.128207 .0149588 > var3| .1992782 .093338 2.14 0.039 .0103252 .3882312 > var4 | -.0040891 .0109331 -0.37 0.710 -.0262219 .0180437 > var5 | .0817256 .1169071 0.70 0.489 -.1549405 .3183917 > var6 | .0291373 .026944 1.08 0.286 -.0254079 .0836825 > var7 | -.0646094 .0320074 -2.02 0.051 -.129405 .0001863 > var8 | -.0867868 .0311875 -2.78 0.008 -.1499227 -.0236509 > OC| -.1040174 .0556577 -1.87 0.069 -.2166906 .0086558 > OC*MV | .0596146 .0324333 1.84 0.074 -.0060433 .1252724 > _cons | .1643745 .0994735 1.65 0.107 -.0369991 .365748 > > > many Thanks > > Nahla Betelmal > * > * For searches and help try: > * http://www.stata.com/help.cgi?search > * http://www.stata.com/support/faqs/resources/statalist-faq/ > * http://www.ats.ucla.edu/stat/stata/ -- Web site for México, las Américas y el Mundo: http://mexicoyelmundo.cide.edu/ ==================================== David Crow Profesor-Investigador/Assistant Professor División de Estudios Internacionales Carretera México-Toluca 3655 Col. Lomas de Santa Fe 01210 México, D.F. Tel.: 5727-9800, ext. 2152 Fax: 5727-9872 ==================================== Conmutador: 5727-98-00 Lada sin costo: 01 800 021 2433 (CIDE) |© * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: interpretation for negative and positive slope combination of interaction term***From:*Nahla Betelmal <nahlaib@gmail.com>

**References**:**st: interpretation for negative and positive slope combination of interaction term***From:*Nahla Betelmal <nahlaib@gmail.com>

- Prev by Date:
**Re: st: dot chart with ci** - Next by Date:
**Re: st: ssc problems? failed install of strgroup** - Previous by thread:
**st: interpretation for negative and positive slope combination of interaction term** - Next by thread:
**Re: st: interpretation for negative and positive slope combination of interaction term** - Index(es):