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Interaction effects in econometrics

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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 prominently published results using interaction effects and examine if they are robust to reasonable specification permutations.

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Authors and Affiliations

  1. School of Economics and Finance, Massey University, Palmerston North, New Zealand

    Hatice Ozer Balli

  2. Suleyman Sah University, Istanbul, Turkey

    Hatice Ozer Balli

  3. Department of Economics, University of Houston, Houston, TX, USA

    Bent E. Sørensen

  4. CEPR, London, UK

    Bent E. Sørensen

Authors
  1. Hatice Ozer Balli
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  2. Bent E. Sørensen
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Correspondence to Hatice Ozer Balli.

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Balli, H.O., Sørensen, B.E. Interaction effects in econometrics. Empir Econ 45, 583–603 (2013). https://doi.org/10.1007/s00181-012-0604-2

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  • DOI: https://doi.org/10.1007/s00181-012-0604-2

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