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Lecture_12_Prof._Arkonac's_Slides_(Ch_8.3_-_end_of_9)

Lecture_12_Prof._Arkonac's_Slides_(Ch_8.3_-_end_of_9) -...

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Nonlinear Regression III (cont’) Assessing Regression Studies I (Fall 2010) Lecture 12 Prof: Seyhan Erden Arkonac, PhD Solution to Problem Set 4 is posted. Problem Set 5 is due at the beginning of class on Tuesday October 19 th . 1
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2 (b) Interactions between continuous and binary variables Y i = 0 + 1 D i + 2 X i + u i D i is binary, X is continuous As specified above, the effect on Y of X (holding constant D ) = 2 , which does not depend on D To allow the effect of X to depend on D , include the “interaction term” D i X i as a regressor: Y i = 0 + 1 D i + 2 X i + 3 ( D i X i ) + u i
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