Hi there,

I've been searching for an answer on the internet but I haven't found anything clear yet. Maybe someone here can help me.

Let's say I have a multiple regression that I should perform for 2 groups separately.

I want to know if the effect of mpg on price is different for the domestic group vs the foreign group. Thus I should make 1 regression and use an interaction effect of mpg and foreign.

How do I know if I should also interact foreign with weight in the regression? And should there be a separate IV for the dummy variable foreign in the regression?

Thank you in advance

Code:
sysuse auto, clear

regress price mpg weight if foreign==0, robust

regress price mpg weight if foreign==1, robust