Hi Statalist,
Whilst this is not a purely stata related question, it relates more to econometrics, and am posting here because I cannot find the answer anywhere on the internet.
In a regression where the interaction term is between a log-transformed variable and a dummy variable, how should that coefficient be interpreted? Here, D1 is a dummy variable, and y is a level variable
e.g. y=α+β1D1+β2ln(X)+δ1(ln(X)∗D1)
I'm looking to find the additional effect on y from a 1% rise in X for D1=1 vs D1=0.
Would the answer be:
a) (exp(δ1)-1)/100
or
b) (exp(β2+δ1)-1)/100 minus (exp(β2)-1)/100
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