Hi Statalist,
I am having trouble interpreting my regression that includes an interaction term with a logged variable, looking at the impact of county house price changes on county divorce rates. Divorce rates are level variable, whilst house prices are logged. The dummy variable D1 takes the value 1 if the county has an above-median unemployment rate.
Divorce rate=α+β1D1+β2ln(House prices)+δ1(ln(house prices)∗D1)
I am struggling to interpret δ1
If β2 = 1.1 and δ1= -0.5, I can come up with two interpretations:
1. For a 10% increase in house prices, when D1=1, divorce rates would increase by (e^(1.1-0.5)-1)/10 = 0.0822
2. For a 10% increase in house prices, when D1=0, divorce rates would increase by (e^(1.1)-1)/10 = 0.2
So clearly there is a difference in increase of 0.2-0.0822 = 0.1178. However, I thought that δ1 was supposed to be the additional increase? But -0.5 doesn't reconcile the difference in divorce rates and neither does (e^(-0.5)-1)/10 = -0.039
For this reason I am struggling to interpret δ1=-0.5 in my regression results. Any help would be much appreciated.
Related Posts with Interpreting coefficients in an interaction between a log and dummy variable
Tricky missing problemHello, I was working on a .ado file which was finsihed successfully. Unofrtunately there is a probl…
simultaneous equation model with generalized method of moments (GMM).hello everyone.. i want to use simultaneous equation model with generalized method of moments (GMM).…
Estimation of CAPM (beta pricing model) with GMMI want to estimate a beta-pricing CAPM model using a portfolio of 12 assets. I want to use the GMM a…
Creating panel data from weekday dataDear all, This is my first posting here on Statalist and it's regarding reshaping some data on stor…
To determine a discriminatory value for MUAC for risk of mortality by 12 monthsDear Experts, I want to obtain a cut-off for MUAC among infants less than 6 months of age. These a…
Subscribe to:
Post Comments (Atom)
0 Response to Interpreting coefficients in an interaction between a log and dummy variable
Post a Comment