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- Fri Mar 13, 2020 3:32 pm
- Forum: Econometric Discussions
- Topic: Model specifications - Independent variables interaction: hierarchy principle
- Replies: 0
- Views: 10096
Model specifications - Independent variables interaction: hierarchy principle
I am testing the effect of commodity demand shocks to the foreign exchange market. Because my hypotheses include three-way interaction effects, I test my hypotheses using hierarchical regression model. Is it absolutely necessary to include all lower-level interactions? Assume that the 3 variables ar...