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Interaction terms in logit and probit models

2003; Elsevier BV; Volume: 80; Issue: 1 Linguagem: Inglês

10.1016/s0165-1765(03)00032-6

1873-7374

Chunrong Ai, Edward C. Norton,

Fiscal Policy and Economic Growth

The magnitude of the interaction effect in nonlinear models does not equal the marginal effect of the interaction term, can be of opposite sign, and its statistical significance is not calculated by standard software. We present the correct way to estimate the magnitude and standard errors of the interaction effect in nonlinear models.