I have 3 variables, say x, y, and z. x and y are dummies, z is continuous. I want to do a three-way interaction and I wonder which is the correct way? My variable of interest is x*y*z, and I expect it to be significantly positive. As you can see from the results, one methodology shows it is significantly positively associated with my DV, while the other has insignificant relationship.
Code:
reg DV i.x#i.y#c.z control1 control2 control3 i.industry i.year, vce(cluster industry)
-------------------------------------------------------------------------------------------------
| Robust
DV | Coef. Std. Err. t P>|t| [95% Conf. Interval]
--------------------------------+----------------------------------------------------------------
x#y#c.z |
0 0 | .3318569 .0373612 8.88 0.000 .2530317 .410682
0 1 | .1726281 .0372657 4.63 0.000 .0940044 .2512519
1 0 | .1279661 .0340517 3.76 0.002 .0561234 .1998088
1 1 | .0865039 .0337273 2.56 0.020 .0153455 .1576623
reg DV i.x##i.y##c.z control1 control2 control3 i.industry i.year, vce(cluster industry)
-------------------------------------------------------------------------------------------------
| Robust
DV | Coef. Std. Err. t P>|t| [95% Conf. Interval]
--------------------------------+----------------------------------------------------------------
1.x | .0992311 .0556105 1.78 0.092 -.0180967 .216559
1.y | .0987155 .0266313 3.71 0.002 .0425284 .1549026
|
x#y |
1 1 | -.0726428 .0677343 -1.07 0.298 -.2155498 .0702641
|
z | .1693954 .0403849 4.19 0.001 .0841908 .2546
|
x#c.z |
1 | .004427 .097611 0.05 0.964 -.2015142 .2103682
|
y#c.z |
1 | .0496641 .0587866 0.84 0.410 -.0743649 .173693
|
x#y#c.z |
1 1 | -.0344931 .16652 -0.21 0.838 -.3858197 .3168335
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