In determining the partial effect on dummy variable d in a regression model with an interaction variable $\hat{y}$ = b₀ + b₁x + b₂d + b₃xd, the numeric variable x value needs to be known.

Question

Quizplus · Accepted Answer

The partial effect of the dummy variable $d$ in the presence of an interaction term $xd$ (as indicated by the term $b_{13}xd$ in the regression model) depends on the value of the numeric variable $x$, because the effect of $d$ on the dependent variable is modified by the value of $x$.

In Determining the Partial Effect on Dummy Variable D in a Regression