IDEAS home Printed from https://ideas.repec.org/a/inm/ormksc/v26y2007i3p438-445.html
   My bibliography  Save this article

Mean-Centering Does Not Alleviate Collinearity Problems in Moderated Multiple Regression Models

Author

Listed:
  • Raj Echambadi

    (Department of Marketing, College of Business Administration, University of Central Florida, P.O. Box 161400, Orlando, Florida 32816-1400)

  • James D. Hess

    (Department of Marketing and Entrepreneurship, C.T. Bauer College of Business, 375H Melcher Hall, University of Houston, Houston, Texas 77204)

Abstract

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 2 . We also show that the determinants of the cross product matrix are identical for uncentered and mean-centered data, so the collinearity problem in the moderated regression is unchanged by mean-centering. Many empirical marketing researchers commonly mean-center their moderated regression data hoping that this will improve the precision of estimates from ill conditioned, collinear data, but unfortunately, this hope is futile. Therefore, researchers using moderated regression models should not mean-center in a specious attempt to mitigate collinearity between the linear and the interaction terms. Of course, researchers may wish to mean-center for interpretive purposes and other reasons.

Suggested Citation

  • Raj Echambadi & James D. Hess, 2007. "Mean-Centering Does Not Alleviate Collinearity Problems in Moderated Multiple Regression Models," Marketing Science, INFORMS, vol. 26(3), pages 438-445, 05-06.
    • Handle: RePEc:inm:ormksc:v:26:y:2007:i:3:p:438-445
    DOI: 10.1287/mksc.1060.0263
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mksc.1060.0263
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mksc.1060.0263?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rajdeep Grewal & Joseph A. Cote & Hans Baumgartner, 2004. "Multicollinearity and Measurement Error in Structural Equation Models: Implications for Theory Testing," Marketing Science, INFORMS, vol. 23(4), pages 519-529, June.
    2. Praveen K. Kopalle & Donald R. Lehmann, 2006. "Setting Quality Expectations When Entering a Market: What Should the Promise Be?," Marketing Science, INFORMS, vol. 25(1), pages 8-24, 01-02.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qiang Meng & Jingxia Liu & Fengrui Li & Peng Chen & Junzeng Xu & Yawei Li & Tangzhe Nie & Yu Han, 2025. "A Coupled Least Absolute Shrinkage and Selection Operator–Backpropagation Model for Estimating Evapotranspiration in Xizang Plateau Irrigation Districts with Reduced Meteorological Variables," Agriculture, MDPI, vol. 15(5), pages 1-29, March.
    2. Mahabubur Rahman & M. Ángeles Rodríguez-Serrano & Mary Lambkin, 2019. "Brand equity and firm performance: the complementary role of corporate social responsibility," Journal of Brand Management, Palgrave Macmillan, vol. 26(6), pages 691-704, November.
    3. Petra Dickel & Monika Sienknecht & Jacob Hörisch, 2021. "The early bird catches the worm: an empirical analysis of imprinting in social entrepreneurship," Journal of Business Economics, Springer, vol. 91(2), pages 127-150, March.
    4. Lee, Ruby P. & Johnson, Jean L. & Grewal, Rajdeep, 2008. "Understanding the antecedents of collateral learning in new product alliances," International Journal of Research in Marketing, Elsevier, vol. 25(3), pages 192-200.
    5. You-Kyung Lee, 2021. "Impacts of Digital Technostress and Digital Technology Self-Efficacy on Fintech Usage Intention of Chinese Gen Z Consumers," Sustainability, MDPI, vol. 13(9), pages 1-15, April.
    6. Kee-Young Kwahk & Byoungsoo Kim, 2017. "Effects of social media on consumers’ purchase decisions: evidence from Taobao," Service Business, Springer;Pan-Pacific Business Association, vol. 11(4), pages 803-829, December.
    7. Horstmann, Felix, 2017. "Measuring the shopper's attitude toward the point of sale display: Scale development and validation," Journal of Retailing and Consumer Services, Elsevier, vol. 36(C), pages 112-123.
    8. Delre, Sebastiano A. & Panico, Claudio & Wierenga, Berend, 2017. "Competitive strategies in the motion picture industry: An ABM to study investment decisions," International Journal of Research in Marketing, Elsevier, vol. 34(1), pages 69-99.
    9. Trong Tuan Luu, 2019. "CSR and Customer Value Co-creation Behavior: The Moderation Mechanisms of Servant Leadership and Relationship Marketing Orientation," Journal of Business Ethics, Springer, vol. 155(2), pages 379-398, March.
    10. M. Billur Akdeniz & Roger J. Calantone, 2017. "A longitudinal examination of the impact of quality perception gap on brand performance in the US Automotive Industry," Marketing Letters, Springer, vol. 28(1), pages 43-57, March.
    11. Mittal, Divya & Agrawal, Shiv Ratan, 2016. "Price transparency reflects assurance and reliability," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 43-51.
    12. Nathaniel Boso & Paige S Carter & Jonathan Annan, 2016. "When is brand orientation a useful strategic posture?," Journal of Brand Management, Palgrave Macmillan, vol. 23(4), pages 363-382, July.
    13. Franke, George R. & Sarstedt, Marko & Danks, Nicholas P., 2021. "Assessing measure congruence in nomological networks," Journal of Business Research, Elsevier, vol. 130(C), pages 318-334.
    14. Yi-Shih Chung & Paul Tae-Woo Lee & Jeong-Kwan Lee, 2017. "Burnout in seafarers: its antecedents and effects on incidents at sea," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(7), pages 916-931, October.
    15. Ana B. Casado & Francisco J. Mas & Hans Kasper, 2006. "Explaining Satisfaction In Double Deviation Scenarios: The Effects Of Anger And Distributive Justice," Working Papers. Serie EC 2006-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    16. Ralf van der Lans & Joseph A. Cote & Catherine A. Cole & Siew Meng Leong & Ale Smidts & Pamela W. Henderson & Christian Bluemelhuber & Paul A. Bottomley & John R. Doyle & Alexander Fedorikhin & Janaki, 2009. "Cross-National Logo Evaluation Analysis: An Individual-Level Approach," Marketing Science, INFORMS, vol. 28(5), pages 968-985, 09-10.
      • van der Lans, R.J.A. & Cote, J.A. & Cole, C.A. & Leong, S.M. & Smidts, A. & Henderson, P.W. & Bluemelhuber, C. & Bottomley, P.A. & Doyle, J.R. & Fedorikhin, A.S. & Janakiraman, M. & Ramaseshan, B. & S, 2008. "Cross-National Logo Evaluation Analysis: An Individual Level Approach," ERIM Report Series Research in Management ERS-2008-055-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    17. Gagnon-Bartsch, Tristan & Bushong, Benjamin, 2022. "Learning with misattribution of reference dependence," Journal of Economic Theory, Elsevier, vol. 203(C).
    18. M. Ab Hamid & Z. Mustafa & N. Suradi & F. Idris & M. Abdullah, 2013. "Value-based performance excellence measurement for higher education institution: instrument validation," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(6), pages 3019-3030, October.
    19. Noppadol Phaosathianphan & Adisorn Leelasantitham, 2019. "Understanding the Adoption Factors Influence on the Use of Intelligent Travel Assistant (ITA) for Eco-Tourists: An Extension of the UTAUT," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(08), pages 1-26, December.
    20. Yan Chen & Dennis F. Galletta & Paul Benjamin Lowry & Xin (Robert) Luo & Gregory D. Moody & Robert Willison, 2021. "Understanding Inconsistent Employee Compliance with Information Security Policies Through the Lens of the Extended Parallel Process Model," Information Systems Research, INFORMS, vol. 32(3), pages 1043-1065, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:26:y:2007:i:3:p:438-445. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.