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Encyclopedia Entry

Moderating Variable

Wendy K. Olsen

A moderating variable represents a process or a factor that alters the impact of an independent variable X on a dependent variable Y . The moderating variable may take the form of an indicator variable (0/1 values), a categorical variable, or a continuous variable. Moderation of the effects of X on Y is usually of interest in the context of a well-theorized area of research, such as the provision of labor by individuals in which the human capital and labor market segmentation theories are both well established. Variables reflecting these two theories can be put together in a multiple regression equation, and a path analysis involving two stages (labor force participation in the first stage and wage determination in the second) can be developed. Paths through the model involve the multiplication of the coefficients from X ...

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