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st: interpreting cofficient on interaction of two logged variables

From   "D'Souza, Anna - ERS" <>
To   "" <>
Subject   st: interpreting cofficient on interaction of two logged variables
Date   Tue, 21 Aug 2012 12:40:59 +0000


I am interested in estimating the following model: log y = b0 + b1 log x1 + b2 log x2 + b3 (log x1 * log x2) + e

Question 1: Does anyone have a reference that describes the interaction of logged variables? I am looking for a justification as to why to use "log x1 * log x2" vs. log (x1 * x2).

Question 2: What is the best way to calculate the (i) average marginal effect on x1, and (ii) the marginal effect of x1 evaluated at the mean of x2 in STATA?

Thank you,


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