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From |
lreine ycenna <[email protected]> |

To |
[email protected] |

Subject |
Re: st: Intepretation of interaction terms |

Date |
Mon, 23 May 2011 13:33:16 +0100 |

If I understood correctly, you saying that the interpretation of a, b, and c are the same both in (1) and (2)? e.g. a is the effect of a, when the other variables =0. b is the effect of b, when others =0. axb is the effect of both a and b when c =0...etc. On 23 May 2011 13:07, Maarten Buis <[email protected]> wrote: > On Mon, May 23, 2011 at 1:45 PM, lreine ycenna wrote: >> I have linear equations, all varables are numeric and I'm using >> xtreg,rreg and pooled: >> >> (1) y = a + b + axb >> >> (2) y = a + b + c + axb + axc >> >> >> In (1), the coefficient of a becomes the effect of a when b is zero; >> coef of b becomes the effect of b when a is zero. >> In (2), since not all variables are interacted, we cannot inteprete it >> as we do in (2). Therefore, the coef of b is influenced by c, and the >> coef of c is influenced by b. > > In (2) the coefficient of a (b1) is the effect of a (x1) when b (x2) > and c (x3) are both 0. You can see this by rewriting (2) as (2a). Here > I called a b and c as x1 x2 and x3 and explicitly added the > coefficients (b1 till b5). > > (2a) y = b0 + b1 x1 + b2 x2 + b3 x3 + b4 x1 x2 + b5 x1 x3 > y = b0 + (b1 + b4 x2 + b5 x3) x1 + b2 x2 + b3 x3 > > So the effect of x1 is (b1 + b4 x2 + b5 x3), which will become b1 > when both x2 and x3 are 0. > > The coefficient of b (b2) is the effect of b (x2) when a (x1) is 0. > You can see this by rewriting (2) as (2b). > > (2b) y = b0 + b1 x1 + b2 x2 + b3 x3 + b4 x1 x2 + b5 x1 x3 > y = b0 + b1 x1 + (b2 + b4 x1) x2 + b3 x3 +b5 x1 x3 > > So the effect of x2 is (b2 + b4 x1) , which will become b2 when x1 is 0. > > The coefficient of c (b3) is the effect of c (x3) when a (x1) is 0. > You can see this by rewriting (2) as (2c) > > (2c) y = b0 + b1 x1 + b2 x2 + b3 x3 + b4 x1 x2 + b5 x1 x3 > y = b0 + b1 x1 + b2 x2 +( b3 + b5 x1) x3 + b4 x1 x2 > > So the effect of x3 is (b3 + b5 x1) , which will become b3 when x1 is 0. > > Hope this helps, > Maarten > > -------------------------- > Maarten L. Buis > Institut fuer Soziologie > Universitaet Tuebingen > Wilhelmstrasse 36 > 72074 Tuebingen > Germany > > > http://www.maartenbuis.nl > -------------------------- > * > * 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/ > * * 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: st: Intepretation of interaction terms***From:*Maarten Buis <[email protected]>

**Re: st: Intepretation of interaction terms***From:*Maarten Buis <[email protected]>

**References**:**st: Intepretation of interaction terms***From:*lreine ycenna <[email protected]>

**Re: st: Intepretation of interaction terms***From:*Maarten Buis <[email protected]>

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