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Interaction effects in econometrics

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  • Balli, Hatice Ozer
  • Sorensen, Bent E.

Abstract

We provide practical advice for applied economists regarding robust specification and interpretation of linear regression models with interaction terms. We replicate a number of prominent published results using interaction effects and examine if they are robust to reasonable specification permutations.

Suggested Citation

  • Balli, Hatice Ozer & Sorensen, Bent E., 2012. "Interaction effects in econometrics," MPRA Paper 38608, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38608
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    References listed on IDEAS

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    1. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer & Robert Vishny, 2002. "Investor Protection and Corporate Valuation," Journal of Finance, American Finance Association, vol. 57(3), pages 1147-1170, June.
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    6. Caprio, Gerard & Laeven, Luc & Levine, Ross, 2007. "Governance and bank valuation," Journal of Financial Intermediation, Elsevier, vol. 16(4), pages 584-617, October.
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    More about this item

    Keywords

    Non-Linear Regression; Interaction Terms;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

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