Analyzing Interaction Effects in Composite-Based SEM

 
Composite-Based SEM
 
Chapter 11: Analyzing Interaction Effects
 
Topics
 
The logic of interaction
Estimating interaction effects with composite-based SEM
Multigroup analysis
The two-stage approach
The orthogonalizing approach
Visualizing interaction effects
Surface analysis
Spotlight analysis
Floodlight analysis
Three-way interactions
Outlook: Nonlinear effects
 
2
 
What is a Moderator?
 
(Baron & Kenny 1986, p. 1174)
 
3
“In general terms, a moderator is a qualitative (e.g.,
sex, race, class) or quantitative (e.g., level of reward)
variable that affects the direction and/or strength of
the relation between an independent or predictor
variable and a dependent or criterion variable.”
 
An Example of Moderation
 
4
 
Analyzing Interaction Effects by Means of
Multigroup Analysis
 
1.
Split sample into two (or more) subsamples (categories).
2.
Categorize observations according to the level of the moderator
variable.
3.
Estimate the path coefficients for each subsample.
4.
Interpret differences between path coefficients as moderating
effects.
 
5
 
Analyzing Interaction Effects by Means of
Multigroup Analysis
 
6
 
Discussion on Group Comparisons
 
Adequate for dichotomous moderating variables and/or experimental
designs (Bagozzi, Yi & Singh, 1991).
For continuous variables:
Dichotomization or data splitting required:
o
Median split or
o
Forming three groups, ignoring middle third
Problems interpreting the results:
o
Dichotomization is arbitrary.
o
Within-group variance remains unanalyzed.
Rather a quick check.
 
7
 
Minimal Model
 
8
 
Alternative Representation
 
9
 
The Meaning of Path Coefficients Changes
 
The path coefficients between latent variables do no longer represent
main effects but so-called "single effects".
Single effects can differ (also strongly) in magnitude from the
corresponding main effects.
A single effect expresses the strength of an effect when the
moderator variable is zero.
It is indispensable to include all single effects in the model.
 
10
 
The Two-Stage Approach for Analyzing
Interaction Effects
 
Stage 1:
 Estimating the main effects model (without the interaction).
Obtain construct scores / construct scores correlation matrix
Obtain reliabilities of construct scores
 
Stage 2: 
Estimating the full model (including the interaction).
Use construct scores as indicators.
Devise reliabilities.
Create interaction term.
 
11
 
The Orthogonalizing Approach
 
Applicable to interactions of latent variables
Regress product indicators on the indicators of the independent and
the moderator variable:
 
 
Use the residuals as indicators of the interaction term!
Advantage: Single effects are very similar to main effects.
 
12
The
Orthogonalizing
Approach
13
Little, Bovaird &
Widaman, 2006;
Chin & Henseler,
2010)
 
Quantifying Interaction Effects
 
Effect size:
 
Effect sizes of 0.02/0.15/0.35 are regarded as weak/moderate/strong
(Cohen 1988).
“Even a small interaction effect can be meaningful under extreme
moderating conditions, if the resulting beta changes are meaningful,
then it is important to take these conditions into account” (Chin,
Marcolin & Newsted 2003, p. 211).
 
14
 
Visualizing
Interaction
Effects
 
15
 
Visualizing Interaction Effects
 
16
 
Visualizing Interaction Effects
 
17
 
A Three-Way Interaction
 
18
 
Alternative Representation
 
19
 
Discussion on Three-Way Interactions
 
Three-way interactions are difficult to interpret and explain to readers
(“μ2 influences the strength of μ1’s effect on the effect of ξ on η”).
A model containing three-way interactions does not tend to be
parsimonious.
Some editors / reviewers / readers love three-way interactions (and
some don’t).
 
20
 
Quadratic Effects
 
Quadratic effects can be interpreted as „auto-moderation“, i.e., an
independent variable moderates its own effect.
 
21
 
The Different Shapes of a Quadratic Effect
 
22
 
Bibliography
 
Bagozzi, R. P., Yi, Y., & Singh, S. (1991). On the use of structural equation models in experimental designs: Two
extensions. International Journal of Research in Marketing, 8(2), 125–140.
Baron, R.M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research:
Conceptual, strategic, and statistical considerations. 
Journal of Personality and Social Psychology
, 51(6), 1173–
1182.
Chin, W. W., Marcolin, B. L., & Newsted, P. R. (2003). A partial least squares latent variable modeling approach for
measuring interaction effects: Results from a Monte Carlo simulation study and an electronic-mail
emotion/adoption study. 
Information Systems Research
, 14(2), 189–217.
Cohen, J. (1988). 
Statistical Power Analysis for the Behavioral Sciences
. Mahwah, NJ: Erlbaum.
Henseler, J. (2020). 
Composite-Based Structural Equation Modeling: Analyzing Latent and Emergent Variables
, New
York: Guilford Press.
Henseler, J., & Chin, W.W. (2010). A comparison of approaches for the analysis of interaction effects between latent
variables using partial least squares path modeling. 
Structural Equation Modeling: A Multidisciplinary Journal
,
17(1), 82–109.
Little, T. D., Bovaird, J. A., & Widaman, K. F. (2006). On the merits of orthogonalizing powered and product terms:
Implications for modeling interactions among latent variables. 
Structural Equation Modeling
, 13(4), 497–519.
 
23
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Explore the concept of interaction effects in composite-based structural equation modeling (SEM) through topics like the logic of interaction, estimating effects, multigroup analysis, and visualizing effects. Learn about moderators, their role in relationships between variables, and techniques for analyzing interaction effects using multigroup analysis. Consider group comparisons, minimal models, and alternative representations in understanding and interpreting these effects.

  • Interaction effects
  • SEM
  • Moderators
  • Multigroup analysis
  • Group comparisons

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  1. Composite-Based SEM Chapter 11: Analyzing Interaction Effects

  2. Topics The logic of interaction Estimating interaction effects with composite-based SEM Multigroup analysis The two-stage approach The orthogonalizing approach Visualizing interaction effects Surface analysis Spotlight analysis Floodlight analysis Three-way interactions Outlook: Nonlinear effects 2

  3. What is a Moderator? In general terms, a moderator is a qualitative (e.g., sex, race, class) or quantitative (e.g., level of reward) variable that affects the direction and/or strength of the relation between an independent or predictor variable and a dependent or criterion variable. (Baron & Kenny 1986, p. 1174) 3

  4. An Example of Moderation 4

  5. Analyzing Interaction Effects by Means of Multigroup Analysis 1. Split sample into two (or more) subsamples (categories). 2. Categorize observations according to the level of the moderator variable. 3. Estimate the path coefficients for each subsample. 4. Interpret differences between path coefficients as moderating effects. 5

  6. Analyzing Interaction Effects by Means of Multigroup Analysis ( ) 1 ( ) 1 Observations with moderator variable being high: ( ) 1 ( ) 1 ( ) 2 ( ) 2 Observations with moderator variable being low: ( ) 2 ( ) 2 ( ) 2 ( ) 1 Moderating effect: 6

  7. Discussion on Group Comparisons Adequate for dichotomous moderating variables and/or experimental designs (Bagozzi, Yi & Singh, 1991). For continuous variables: Dichotomization or data splitting required: o Median split or o Forming three groups, ignoring middle third Problems interpreting the results: o Dichotomization is arbitrary. o Within-group variance remains unanalyzed. Rather a quick check. 7

  8. Minimal Model 8

  9. Alternative Representation 9

  10. The Meaning of Path Coefficients Changes The path coefficients between latent variables do no longer represent main effects but so-called "single effects". Single effects can differ (also strongly) in magnitude from the corresponding main effects. A single effect expresses the strength of an effect when the moderator variable is zero. It is indispensable to include all single effects in the model. 10

  11. The Two-Stage Approach for Analyzing Interaction Effects Stage 1: Estimating the main effects model (without the interaction). Obtain construct scores / construct scores correlation matrix Obtain reliabilities of construct scores Stage 2: Estimating the full model (including the interaction). Use construct scores as indicators. Devise reliabilities. Create interaction term. 11

  12. The Orthogonalizing Approach Applicable to interactions of latent variables Regress product indicators on the indicators of the independent and the moderator variable: Use the residuals as indicators of the interaction term! Advantage: Single effects are very similar to main effects. 12

  13. The Orthogonalizing Approach Little, Bovaird & Widaman, 2006; Chin & Henseler, 2010) orthogonalized product indicators 13

  14. Quantifying Interaction Effects 2 model R 2 model R Effect size: = 2 with interactio 1 R n term without interactio n term f 2 model with interactio n term Effect sizes of 0.02/0.15/0.35 are regarded as weak/moderate/strong (Cohen 1988). Even a small interaction effect can be meaningful under extreme moderating conditions, if the resulting beta changes are meaningful, then it is important to take these conditions into account (Chin, Marcolin & Newsted 2003, p. 211). 14

  15. Visualizing Interaction Effects 15

  16. Visualizing Interaction Effects 16

  17. Visualizing Interaction Effects 17

  18. A Three-Way Interaction 18

  19. Alternative Representation 19

  20. Discussion on Three-Way Interactions Three-way interactions are difficult to interpret and explain to readers ( 2 influences the strength of 1 s effect on the effect of on ). A model containing three-way interactions does not tend to be parsimonious. Some editors / reviewers / readers love three-way interactions (and some don t). 20

  21. Quadratic Effects Quadratic effects can be interpreted as auto-moderation , i.e., an independent variable moderates its own effect. 21

  22. The Different Shapes of a Quadratic Effect 22

  23. Bibliography Bagozzi, R. P., Yi, Y., & Singh, S. (1991). On the use of structural equation models in experimental designs: Two extensions. International Journal of Research in Marketing, 8(2), 125 140. Baron, R.M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173 1182. Chin, W. W., Marcolin, B. L., & Newsted, P. R. (2003). A partial least squares latent variable modeling approach for measuring interaction effects: Results from a Monte Carlo simulation study and an electronic-mail emotion/adoption study. Information Systems Research, 14(2), 189 217. Cohen, J. (1988). Statistical Power Analysis for the Behavioral Sciences. Mahwah, NJ: Erlbaum. Henseler, J. (2020). Composite-Based Structural Equation Modeling: Analyzing Latent and Emergent Variables, New York: Guilford Press. Henseler, J., & Chin, W.W. (2010). A comparison of approaches for the analysis of interaction effects between latent variables using partial least squares path modeling. Structural Equation Modeling: A Multidisciplinary Journal, 17(1), 82 109. Little, T. D., Bovaird, J. A., & Widaman, K. F. (2006). On the merits of orthogonalizing powered and product terms: Implications for modeling interactions among latent variables. Structural Equation Modeling, 13(4), 497 519. 23

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