Interpreting the Outcomes of two-part models

Artikel

Interaction effects capture the impact of one explanatory variable x 1 on the marginal effect of another explanatory variable x 2. To explore interaction effects, the so-called interaction terms x 1 x 2 are typically included in estimation specifications. While in linear models the effect of a marginal change in the interaction term is equal to the interaction effect, this equality generally does not hold in nonlinear specifications (Ai and Norton, 2003). This article provides for a general derivation of marginal and interaction effects in both linear and nonlinear models and calculates the formulae of the marginal and interaction effects resulting from the Two-Part Model (2PM), a commonly employed censored regression model. Drawing on a survey of automobile use from Germany, we illustrate several subtleties inherent to the substantive interpretation of interaction effects gleaned from nonlinear models, such as the 2PM.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Applied Economics Letters ; ISSN: 1466-4291 ; Volume: 19 ; Year: 2012 ; Issue: 10 ; Pages: 987-992 ; Abingdon: Taylor & Francis

Classification and Topics

• Classification: Wirtschaft
• Subject: censored regression model ; interaction terms ; marginal and interaction effects

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frondel, Manuel ; Vance, Colin
• Event: Veröffentlichung
• (who): Taylor & Francis ; ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Abingdon
• (when): 2012

Further information

• DOI: http://www.tandfonline.com/doi/abs/10.1080/13504851.2011.610733
• Handle: http://hdl.handle.net/10419/129079
• Last update: 10.03.2025, 11:45 AM CET