Re: st: mean centering

[Richard Williams <richardwilliams.ndu@gmail.com>]

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
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