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Re: st: mean centering


From   Richard Williams <richardwilliams.ndu@gmail.com>
To   statalist@hsphsun2.harvard.edu, statalist@hsphsun2.harvard.edu
Subject   Re: st: mean centering
Date   Mon, 21 Jan 2013 10:35:39 -0500

At 10:15 AM 1/20/2013, Aljar Meesters wrote:
Dear James,

I think that in general one centers variables to make the
interpretation of the marginal effects, conditional on the averages,
easier.
Centering variables in a pane should be based on the means of all the
observations of the particular variables and never by groups. If you
deducted the means of groups, you are carrying out a within
transformation, which will lead to a fixed effects model, which is
certainly not your goal of centering the variables.
You can do this by:
egen meanvar = mean(var)
gen centered_var = var - meanvar

This may not work quite right if there is missing data or if you are otherwise only analyzing a subset of the data.

I started teaching centering because my students were making statements like "once you control for female*income, the effect of female becomes insignificant." But centering also makes the results more intelligible.

The next time I teach this, I think I am going to place some emphasis on using the margins command on graphing relationship. Centering tells you things about "average" people, but a graph can give you a broader range and doesn't require that you alter the variables first.

With regards to computational issues I have seen instances where even Stata chokes on an X^2 term, e.g. year^2. Rescaling the variable or centering it seems to help.


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Richard Williams, Notre Dame Dept of Sociology
OFFICE: (574)631-6668, (574)631-6463
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EMAIL:  Richard.A.Williams.5@ND.Edu
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