I am currently working on a study in which I am using beta regression (in Stata). My depend variable is bounded between 0 and 1. To interpret the effects of my independent variables I am using the margins command.
However, the problem is that interaction-terms cannot be interpreted using the margins command. My model includes a quadratic term, i.e.: y=a+bX+cX^2. I want to visualize the non-linear connection between the variables by using graphs.
My question might be a bit simple, but I am not sure which values I should choose to visualize the effect. Should I use the original depend variable or the predict values?
Thanks in advance for the help.
Best Answer
You could have a scatter plot with the data (dependent variable on the Y axis, one independent variable on the X axis) then add lines for different levels of the other independent variable. The lines would be of the predicted dependent variable.