Causal Design

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Grad Fellow Notes: Interaction Terms in STATA

While using hashtags is simpler than generating the interaction term as a new variable, there is a necessary rule to remember: use the variable prefixes. In Stata, -i.[variable]- indicates that the variable is categorical, and -c.[variable]- indicates a continuous variable. Because the hashtag code assumes the variables in the interaction term are categorical, it is necessary to define numerical variables as numerical with the -c.- prefix.
Wage = β0 + β1Education + β2Minority + β3Education*Minority + ε

Linear Probability Models

Introduction It is often the case in Impact Evaluation that we have a need to analyze binary, qualitative variables such as savings behavior (saves vs. does not save), voting behavior (votes vs. does not vote), or gender (male vs. female). In general, we are interested in whether a condition exists or does not exist, rather […]