Since I think it is more appropriate to ask this question in a different topic, I created a new topic.
I was wondering what it means if my interaction term has the same value as one of my variables of which it is interacted with, but has the opposite sign.
I am estimating the effect of a policy (that can exist in two forms/binary variable) on district revenue. Since not only the policy, but also the internsity matters (irrespective of the policy, the intensity is always positive), I included an interaction term. However it seems like the value of the interaction term is almost equal to the policy variable if policy==1. If the policy takes on the value of 1 because the first policy is in place, it then seems like there is no effect of intensity correct? I was wondering if this indicates some mistake.
Code:
xtreg lnDistrict_Revenue L.i.P##L.c.Intensity c.L.lnUrbanPopulation##c.L.lnUrbanPopulation c.L.lnPropertyvalue c.L.lnGrant##c.L.lnGrant c.L.lnIncome_percapita c.L.ShareUnemployed c.L.ShareElderly c.L.ShareYoung L.lnSpending i.Year, fe cluster(District)
Fixed-effects (within) regression Number of obs = 3,204
Group variable: District Number of groups = 298
R-sq: Obs per group:
within = 0.7285 min = 6
between = 0.0179 avg = 10.8
overall = 0.0325 max = 11
F(23,297) = 172.78
corr(u_i, Xb) = -0.9326 Prob > F = 0.0000
(Std. Err. adjusted for 298 clusters in District)
-----------------------------------------------------------------------------------------------------------
| Robust
lnDistrict_Revenue | Coef. Std. Err. t P>|t| [95% Conf. Interval]
------------------------------------------+----------------------------------------------------------------
L.P |
1 | .0351146 .0151471 2.32 0.021 .0053053 .0649238
|
Intensity |
L1. | .19091 .0975182 1.96 0.051 -.0010041 .3828242
|
L.P#cL.Intensity |
1 | -.1870479 .1081467 -1.73 0.085 -.3998788 .025783
|
lnUrbanPopulation |
L1. | 2.370568 1.676327 1.41 0.158 -.9284165 5.669553
|
cL.lnUrbanPopulation#cL.lnUrbanPopulation | -.1596966 .0787233 -2.03 0.043 -.3146229 -.0047704
|
lnPropertyvalue |
L1. | -.7620712 .0773144 -9.86 0.000 -.9142247 -.6099178
|
lnGrant |
L1. | .9593062 .2999702 3.20 0.002 .3689699 1.549642
|
cL.lnGrant#cL.lnGrant | -.0228989 .0081084 -2.82 0.005 -.0388561 -.0069416
|
lnIncome_percapita |
L1. | .0228362 .1156852 0.20 0.844 -.2048304 .2505027
|
ShareUnemployed |
L1. | -.0163021 .0095847 -1.70 0.090 -.0351648 .0025605
|
ShareElderly |
L1. | -.0026668 .002733 -0.98 0.330 -.0080453 .0027117
|
ShareYoung |
L1. | -.0039125 .003059 -1.28 0.202 -.0099326 .0021076
|
lnSpending |
L1. | -.0034049 .0030913 -1.10 0.272 -.0094886 .0026787
|
Year |
2002 | .0454305 .0154763 2.94 0.004 .0149733 .0758876
2003 | .110855 .0188005 5.90 0.000 .073856 .147854
2004 | .1813692 .0234291 7.74 0.000 .1352611 .2274773
2005 | .1985591 .0317878 6.25 0.000 .1360012 .261117
2006 | .1323212 .0377318 3.51 0.001 .0580657 .2065767
2007 | .1298228 .042398 3.06 0.002 .0463842 .2132615
2008 | .1263483 .0453511 2.79 0.006 .0370981 .2155986
2009 | .1168673 .0481765 2.43 0.016 .0220568 .2116778
2010 | .1327302 .0562972 2.36 0.019 .0219383 .2435221
2011 | .1738778 .0612029 2.84 0.005 .0534314 .2943241
|
_cons | -5.173469 8.324948 -0.62 0.535 -21.55683 11.20989
------------------------------------------+----------------------------------------------------------------
sigma_u | .66077134
sigma_e | .06458734
rho | .99053626 (fraction of variance due to u_i)
---------------------------------------------------------------------------------------------------When I split the sample based on policy (0 or 1) instead of the interaction term, It seems like there is no effect of intensity when policy 1 as compared when policy is 0. I know this is different because I am the interacting every variable.
0 Response to intercation term same value as main variable
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