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Interactions Between Independent Variables (SW Section 8.3)

Interactions Between Independent Variables (SW Section 8.3). (a) Interactions of two binary vars. Interpreting the coefficients. Example. (b) Interactions of continuous and binary variables. Binary-continuous interactions: the two regression lines.

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Interactions Between Independent Variables (SW Section 8.3)

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  1. Interactions Between Independent Variables (SW Section 8.3)

  2. (a) Interactions of two binary vars

  3. Interpreting the coefficients

  4. Example

  5. (b) Interactions of continuous and binary variables

  6. Binary-continuous interactions: the two regression lines

  7. Example: TestScore, STR, and HiEL (=1 if PctEL >10)

  8. Testing Hypotheses about Interaction Effects

  9. (c) Interactions of continuous vars

  10. Example: TestScore, STR, PctEL

  11. Testing Hypotheses about Interaction Effects

  12. Application: Nonlinear Effects on Test Scores of the Student-Teacher Ratio (SW Section 8.4)

  13. 1. Are there different effects for different STR levels?

  14. 2. Are there interactions between PctEL and STR?

  15. What is a good “base” specification?

  16. Tests of joint hypotheses:

  17. Interpreting the regression functions via plots:

  18. Comparing the regressions with interactions:

  19. Application: Berg Dale & Krueger (QJE, 2002)

  20. Application: Berg Dale & Krueger (QJE, 2002)

  21. Application: Berg Dale & Krueger (QJE, 2002)

  22. Application: Berg Dale & Krueger (QJE, 2002)

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