Hi,

I am little confuse about the way stata handle and designate interaction variables. To me (and to all textbooks), an interaction variable is X*W. But in stata language, interaction variables are coded X#W but they are not equivalent to X*W in a regression framework.

As an example, I would have expected that:
Code:
sysuse nlsw88.dta
gen south_married=south*married
reg wage  south south_married
gives the same results than
Code:
reg wage  i.south i.south#i.married
But they do not. The coefficients for the interaction term are the same but not the main effect (south). How do you interpret both south coefficients then?

Thanks for your help