Article ID: | iaor20082247 |
Country: | United States |
Volume: | 26 |
Issue: | 3 |
Start Page Number: | 438 |
End Page Number: | 445 |
Publication Date: | May 2007 |
Journal: | Marketing Science |
Authors: | Hess James D., Echambadi Raj |
The cross-product term in moderated regression may be collinear with its constituent parts, making it difficult to detect main, simple, and interaction effects. The literature shows that mean-centering can reduce the covariance between the linear and the interaction terms, thereby suggesting that it reduces collinearity. We analytically prove that mean-centering neither changes the computational precision of parameters, the sampling accuracy of main effects, simple effects, interaction effects, nor the