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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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    6. 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.
    7. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
    8. Braumoeller, Bear F., 2004. "Hypothesis Testing and Multiplicative Interaction Terms," International Organization, Cambridge University Press, vol. 58(4), pages 807-820, 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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