Testing Hypotheses About Interaction Terms in Nonlinear Models

Posted: 15 Jul 2009

See all articles by William H. Greene

William H. Greene

New York University Stern School of Business

Date Written: July 15, 2009

Abstract

We further examine the interaction effect in nonlinear models that has recently been discussed by Ai and Norton (2003). Statistical tests about partial effects and interaction terms are not necessarily informative in the context of the estimated model. We suggest more useful ways that do not involve statistical testing to examine the interaction effect in binary choice models.

Keywords: Interaction effect, Interaction term, Partial effect, Probit, Logit, Nonlinear Models

JEL Classification: C12, C25 , C51

Suggested Citation

Greene, William H., Testing Hypotheses About Interaction Terms in Nonlinear Models (July 15, 2009). Available at SSRN: https://ssrn.com/abstract=1434460

William H. Greene (Contact Author)

New York University Stern School of Business ( email )

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