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...

How much do the market values of housing reflect its interior design? Does the interior design interact with other housing attributes? Following the recent research based on “graph theory,” this paper confirms the importance of internal design variables in a hedonic pricing model, which is...

Interaction effects capture the impact of one explanatory variable x1 on the marginal effect of another explanatory variable x2. To explore interaction effects, socalled interaction terms x1x2 are typically included in estimation specifications. While in linear models the effect of a marginal...

Interaction terms are often misinterpreted in the empirical economics literature by assuming that the coefficient of interest represents unconditional marginal changes. I present the correct way to estimate conditional marginal changes in a series of non-linear models including (ordered)...

Treatment effects may vary with the observed characteristics of the treated, often with important implications. In the context of experimental data, a growing literature deals with the problem of specifying treatment interaction terms that most effectively capture this variation. Some results of...

Interaction effects capture the impact of one explanatory variable on the marginal effect of another explanatory variable. To explore interaction effects, so-called interaction terms are typically included in estimation specifications. While in linear models the effect of a marginal change in...

We provide practical advice for applied economists regarding specification and interpretation of linear regression models with interaction terms.

In nonlinear regression models, such as probit or logit models, coefficients cannot be interpreted as partial effects. The partial effects are usually nonlinear combinations of all regressors and regression coefficients of the model. We derive the partial effects in such models with a triple...