Using regression tree ensembles to model interaction effects: a graphical approach

C-Tier
Journal: Applied Economics
Year: 2018
Volume: 50
Issue: 58
Pages: 6341-6354

Authors (4)

Score contribution per author:

0.251 = (α=2.01 / 4 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Multiplicative interaction terms are widely used in economics to identify heterogeneous effects and to tailor policy recommendations. The execution of these models is often flawed due to specification and interpretation errors. This article introduces regression trees and regression tree ensembles to model and visualize interaction effects. Tree-based methods include interactions by construction and in a nonlinear manner. Visualizing nonlinear interaction effects in a way that can be easily read overcomes common interpretation errors. We apply the proposed approach to two different datasets to illustrate its usefulness.

Technical Details

RePEc Handle
repec:taf:applec:v:50:y:2018:i:58:p:6341-6354
Journal Field
General
Author Count
4
Added to Database
2026-01-24