Interactions in Regressions

Joseph Hirschberg and Jeanette Lye

No 952, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: Regression specifications frequently employ regressors that are defined as the product of two other regressors to form an interaction. Unfortunately, these models have a number of potential difficulties when it comes to interpretation. In this paper, we discuss two common aspects of these specifications that can lead to difficulties. The first is the change in parameter estimates and tstatistics when different definitions of dummy variables are used. The second involves an application of Fieller’s theorem to draw appropriate inferences from a regression with interaction variables.

Keywords: Interaction effects; dummy variables; linear transformation; Fieller method (search for similar items in EconPapers)
JEL-codes: C12 C51 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2005
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.economics.unimelb.edu.au/downloads/wpapers-05/952.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.economics.unimelb.edu.au/downloads/wpapers-05/952.pdf [301 Moved Permanently]--> http://fbe.unimelb.edu.au/economics/downloads/wpapers-05/952.pdf [301 Moved Permanently]--> https://fbe.unimelb.edu.au/economics/downloads/wpapers-05/952.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:952

Access Statistics for this paper

More papers in Department of Economics - Working Papers Series from The University of Melbourne Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Dandapani Lokanathan ().