3 way interaction (continuous*continuous*binary dummy) interpretation + necessary tests
Hello everyone,
I am currently working on a paper where a 3-way interaction is included in a panel data dataset ( 7 years, +-1500 obs, 204 firms).
X1 in the interaction is a continous variable which is expected to affect the Y.
X2 is also continuous, expected to influence X1's effect on Y.
X3 is a dummy variable which splits up the 7-year time period into 2 periods.
The current regression that has been run looks as follows ( I realise that I will have omitted variables due to the ##, this is just for illustration)
xtreg Y X1 X2 i.X3 X4 c.X1##c.X2##i.X3, fe vce (robust)
I'd like to ask for your advice on how to
Don't hesitate to ELI5: explain like I'm 5!
Running STATA 17.0
I am currently working on a paper where a 3-way interaction is included in a panel data dataset ( 7 years, +-1500 obs, 204 firms).
X1 in the interaction is a continous variable which is expected to affect the Y.
X2 is also continuous, expected to influence X1's effect on Y.
X3 is a dummy variable which splits up the 7-year time period into 2 periods.
The current regression that has been run looks as follows ( I realise that I will have omitted variables due to the ##, this is just for illustration)
xtreg Y X1 X2 i.X3 X4 c.X1##c.X2##i.X3, fe vce (robust)
I'd like to ask for your advice on how to
- interpret any significant variables, and how to best approach this (assuming I can neglect the insignificant coefficients)
- if any tests need to be carried out pre/post regression
Don't hesitate to ELI5: explain like I'm 5!
Running STATA 17.0
