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st: probit - interaction mfx when dummy has >2 categories
From
Tanuku AP <[email protected]>
To
<[email protected]>
Subject
st: probit - interaction mfx when dummy has >2 categories
Date
Sat, 9 Jul 2011 19:22:02 -0400
Hello,
Is there a ready way to deal with interactions (in probit models) when dummy variable has more than 2 categories?
a) find out the correct marginal effects
b) test if interactions are jointly significant
I have quickly read through --inteff-- [Ai and Norton] but it seems that --inteff-- deals with binary qualitative variables only.
--------------------------------------------------------------
For my problem, we have binary variable 'disabled' and five income brackets: income1 - income5. We want to test for joint significance and find out the interaction marginal effects (if any). We cannot collapse the income brackets into 2 categories.
> gen income1d = income1 * disabled //interaction term
....
> logit choice disabled income1 income2 income3 income4 income1d income2d income3d income4d
...
test income1d income2d income3d income4d
--Tanuku
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