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  • Coefficient interpretation of proportions

    Hello. I'm having trouble interpreting coefficients on linear regressions with proportions as independent variables. If my independent variable is the proportion of immigrants in the whole population, does that mean that 1 percentage point in that proportion leads to an increase of beta units on Y, or should that be a 1% change?
    Thank you for in advance for any response.

  • #2
    A proportion is a number between 0 and 1, inclusive of the endpoints. For a more intuitive interpretation, you can rescale the variable to a percentage by multiplying it by 100 or rescale the coefficient by dividing it by 100. Then, the interpretation is that a 1-percentage-point increase in the percentage of immigrants in the population (e.g., from 20% to 21%) is associated with an increase or decrease of \(\hat{\beta}\) percentage points/ dollars/ other units in the outcome.
    Last edited by Andrew Musau; 18 Dec 2024, 07:14.

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    • #3
      Ines:
      welcome to this forum.
      As an aside to Andrew's helpful reply, please note that replying is easier (your OLS may have other issues that go undetected if interested listers cannot take a look at your OLS outcome table) if you share what you typed and what Stata gave you back via CODE delimiters (as per FAQ). Thanks.
      Kind regards,
      Carlo
      (StataNow 18.5)

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