section 4
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Econometrics 1123: Section 4 Handout
Eunice Hanehan@fas.harvard.edu
September 30th, 2010
1. The interaction between Independent Variables
To allow the effect of X1i on Yi to depend on X2i, we can include the interaction term X1i* X2i as a regressor.
Q1. Show that depends on X1= Q2. Plot the regression line of Y and X2, when X1 = a and X1 = b, where a
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