Joirrrid of Occ~iputionulP s j d i o l o g y , 1987, 60,243 255.

Printed in Great Britain

0 1987 The British Psychological Society

Form, effect size and power in

moderated regression analysis

This p;ipcr presents the results o f a simulation study designed to show how a moderator
variable ;ilfech thc l‘orm of the relationship between two other variables. Particular
attention is paid to the relationship ofthc strength of a moderator t o stotisticril signifi-
cance and the magnitude o f the increment in H Z associated with the moderator. The
increment i n It’ is viewed as an inconipletc measure of the strength of inoderator
cllects. We propose a standardized measure of the strength ol’modcrator cllects based
on the rntc ol‘change i n the slope o f the regression surface. The rclirlion ol’sample size
and statistical power t o this measure is investigated.

Much of the published rescarch over the past 15 years in industrial and organizational
psychology has used moderator variables in an attempt to increase thc explanatory power
of reseurchers’ models. Several examples can be seen in studies of role ambiguity, stress. job
involvement and various job attitudcs. These studies were attempting to understand the role
ofpersonality, organization and other situational factors in explaining levels ofan outcome
variable (e.g. Siege1 & Ruh, 1973; Herman CI al., 1975; Johnson & Stinson, 1975; Beehr
c,t ol., 1976; Schuler, 1977; Seybolt & Pavett, 1979).
Additional examples can be found in the job design literature whcre investigators have
been examining individual, organizational, technological and contextual factors which
influence people’s reactions to their jobs (e.g. Hackman & Oldham, 1976; Oldhain ( i f al.,
1976; Sims & Szilagyi. 1976; Dunham, 1977; Champoux, 1978: Pierce rf a/., 1979;
Champoux. 1980; Griffin, 1980; O’Brien & Dowling, 1980; Abdel-Halim, 1981; Champoux.
I98 I ; Jackson r i a / . , 198 I ; Ferris & Gilmore, 1984). There is strong and continuing interest
in the usc of moderator variables in organizational rcsearch, especially as investigators
continue to develop and test ‘ contingency ’ theories of organizational behaviour.
The earliest interest in moderator variables was about different predictorsriterion
correlations within different subgroups of individuals such as sex and ethnicity (Saunders.
1956: Zedeck, 1971; Peters and Champoux, 1979; Arnold, 1982). Possibly because of the
earlier emphasis on the function of a moderator variable, much research has focused on
dilrerences in correlations between the independent and dependent variable for subgroups
of individuals defined by the moderator (e.g. Hackman & Oldham, 1976; Griffin, 1980). I t
has bccomc increasingly clear, however, that the function of moderator variables can be
conceptualized a s affecting the form of the relationship between a predictor and a criterion
variable a s well as the degree of the relationship (Arnold, 1982).
*An earlier. abhreviated version of this papcr WBS prescnted at the American Institute o f Decision Sciences
meeting. Boston, I X-20 November 1981. Requests for reprints should he addressed to Joseph E. Champoux,
Thc Robcrt 0. Anderson Schools of Managemcnt, The University o f New Mexico, Albuquerque, NM
X7131.USA.

243
244 J O S E P H 8. C H A M P O U X A N D W I L L I A M S. P E T E R S

Some articles have appeared in the last several years trying to clarify the definition and
role of moderator variables in various areas of psychological research (Zedeck, 1971 ;Peters
& Champoux, 1979; Champoux & Peters, 1980; Arnold, 1982). Considerable confusion
about the definition and use of moderator variables has been admitted (Guion, 1976). We
think the issues about the use of moderator variables fall into two major categories: ( I ) the
form of relationship between two variables, and (2) the degree of association between two
variables.* Which of the two major categories is of concern to an investigator is determined
by the theoretical models being investigated.
Form qf rela t ionship
Variations in the form of relationship between two variables can be conceptualized as
variations in a regression surface because of a moderator variable. The regression surface is
described by jointly considering the intercept (level) of the regression lines and the slope
(rate of change) of the same lines. The strength of the moderator effects is shown by the rate
of change in slope of the regression line(s).
Degree of ussociution
There are two separate issues of interest to an investigator when examining the effect of
a moderator variable on the degree of association between other variables. The two issues
have not been distinguished previously in the literature. We feel confusion exists, therefore,
about different types of degree of association and appropriate methods of measurement.
First, an investigator may be concerned with finding different degrees of association
between two variables as a function of a third variable. This research issue has been the most
commonly discussed in the literature on moderator variables. The long-standing interest in
industrial psychology with differential validity of tests among different subgroups of a
population illustrates the issue. Here the investigator is seeking to understand differences in
predictive validity of a test among subgroups based on sex, ethnicity or other factors (cf.
S a n d e r s , 1956; Ghiselli, 1963). Also, many of the studies cited earlier used hierarchical
regression analysis to examine differences in the degree of association between variables
because of a moderator variable when the moderator was continuous (e.g. Stone, 1976;
Stone et al., 1977; Champoux, 1980, 1981). The degree of association has usually been
assessed with the increment in RZ.
Second, an investigator may be interested in the strength of the effect of a moderator
variable on the form of relationship between two other variables. We conceptualize this
effect as the rute of change in the regression surface attributable to the moderator variable.
Descriptions of this effect of a moderator variable have not been clearly given in the
literature. We will show later that considerable confusion exists about how to measure this
degree of association.
Methods qf analysis
The literature on moderator variables has described two major methods of analysis.
The first examines correlation coefficients calculated within subgroups formed from the
moderator. This analysis produces accurate results for categorical moderator variables
such as sex or ethnicity, but can produce misleading results if the moderator variable is
continuous and correlated with the dependent variable (Peters & Champoux, 1979). This
method of analysis only answers questions about the degree of association between the
dependent and independent variable (Arnold, 1982).
If the moderator variable is continuous, or the research question is concerned with
variations in the form of the relationship between variables, the appropriate form of analy-
sis is hierarchical multiple regression analysis (Cohen & Cohen, 1975; Peters & Champoux,
*In a general scnse form and degrec of relationship are not completely separate questions. What is connoted
in our issue (2) is differences in degree of linear association as frequently assessed by those examining
correlation coefficients for different subgroups.
 MODERATED REGRESSION A N A L Y S I S 245

1979; Champoux & Peters, 1980; Roberts 8t Glick, 1981; Arnold, 1982). Most users of
hierarchical multiple regression analysis-also called moderated regression analysis
(Saunders, 1956; Zedeck, 1971)--have used the incremental RZ to assess the magnitude of
the interaction effects of their moderator variables. We intend to show later that the
increment in R2 is not the most informative measure. We introduce an alternative assess-
ment of interaction effects detected by moderated regression which we believe is a more
direct assessment of effect size, or the degree of association, between the form of
relationship and the moderator variable being studied.

METHOD
A set of simulations was designed to show how a moderator variable affects the form of
the relationship between two other variables. The simulations were done to enhance under-
standing of the effect of moderator variables, given the degree of misunderstanding we feel
exists in the literature now. The simulations included differences in the magnitude of the
effects of a moderator variable on the form of the relationship.
A standardized measure of moderator effects was derived which summarizes the mag-
nitude of the effect of a moderator variable on the regression surface itself. This measure
assesses the degree of association between a moderator variable and the form of relation-
ship between two other variables. It also allows comparisons of the relative effects of
different moderator variables within the same study and among different studies-an attri-
bute of the measure we illustrate with comparisons among several published studies. We
then consider statistical power and required sample sizes for different magnitudes of
moderator effects.
Our simulation design, and discussion of the results, was based on thejob design theory
set out by Hackman & Oldham (1976). We chose it as an example because of its prominence
in the literature and the large amount of empirical research that has been focused on the
thcory (Hackman & Oldham, 1980). It allows us to put the results of the simulation into the
context of a specific theory, instead of in the abstract.
The Hackman-Oldham theory states that individuals with a strong need for personal
growth on the job will respond more positively to jobs high in motivating potential than
individuals with weak needs for growth. Furthermore, the rate of increase in satisfaction
and motivation will be greater for individuals with strong growth needs than for those with
weak growth needs (Hackman et af., 1975). The theory is stating that the form of the
relationship, as level of response and rate of change in response, will vary between motivat-
ing potential (MPS) and some dependent variable according to the level of growth need
strength (GNS).* The theory is stating a positive main effect of GNS and a positive effect of
GNS on the form of the relationship between MPS and a dependent variable. GNS is,
therefore, expected to have a positive effect on the rate of change in the regression surface.
A series of simulations was done in which samples were generated according to models
which included a moderator effect. Two elements were systematically varied in the simu-
lations: ( I ) the strength of the moderator effect, and (2) the size of the dependent variable
error term.
The simulation followed the regression model
y = 4.0 + 0.01x + 0.402 + ~ ( x z+) c,
where x = Motivating Potential Score (MPS) and z=Growth Need Strength (GNS). The
moderator coefficient dand the residual error e were varied according to the design in Table
I . The variables in the simulated regression were normally distributed with the means and
+Thisintcrpretation of the Hackman-Oldham theory was judgcd by Professor Hackman to bc reasonable,
givcn the prescntation of the theory (telephone convcrsation on I1 October 1980 between Professor
I Iackman and the first author).
240 J O S E P H E. C ‘ H A M P O I J X A N D W I I . I . I A M S. P E T E R S

Fixed for each condition Averages for 50 simulations

Condition d e r,: s, r, % r,: I”(\:)

~~~~~

1 0002 0707 032 0885 0400 -0278 0 126

2 0006 0707 032 0940 0377 -0264 0342
3 0002 1000 032 1131 0308 -0217 0102
4 0006 1000 032 1176 0296 0212 0277

Model: y = 4.0 +0.01 x+O,40z+ d(xz) + e

xisMPSandnormalwith~1,=O,cr,=50
z is GNS and normal with p2=O,cr, = 1 .O
e is normal with p,.-O,o,.as indicated above

standard deviations shown in Table I . All simulation conditions had a correlation between
.s and z =0.32.
The basic condition I parameters were selected to resemble those found i n earlier work
with the Hackman- Oldham theory using the Job Diagnostic Survey (JDS) as the source of
nieasures (e.g. Hackman & Oldham. 1975, 1976; Champoux, 1980). The standard devi-
ations of s ( M P S ) and 2 (GNS) are similar to those of the normative data for the JDS
(Hackman & Oldham, 1980, p. 3 17). Table I also shows the average standard deviation o f y
and the avcrage correlation among all pairs ofvariables for each condition. Fifty samples of
) I = 300 were generatcd under each of thc four conditions.

Although the normal distributions of the independent variables will not accord per-
ltctly with ’ real ’ research conditions, normality or lack of normality is not critical to any
conclusions from the simulation results. I t neither detracts from the comparative results of
the different simulation conditions, nor from the validity of the analysis of power to detect
moderators. The sample sizes were all sufficiently large to rely on the central limit theorcm
for normality of relevant error distributions.
lniplications of the diffcrent moderator coefficients can be seen by comparing the
rcgression surfaces gcneratcd with and without the moderator coefficient d. The regression
surfaces for the additive effects model and the two moderator models are shown in Fig. 1.
Each regression line represents a different level of the moderator variable GNS.
The absence of a moderator effect of z on the regression surface for the additive effects
model is shown by the identical slope ofeach regression line. The presence of a moderator
effect in the four conditions is shown by the changing slope of each regression line. In
contrast to the additive effects model, the lines are not parallel. ‘The steeper and more
rapidly changing slopes of the regression lines for conditions 2 and 4 ( d = 0.006) show the
much stronger moderator effects than found in conditions 1 and 3 (d=0.002).

KESULTS

Table 2 shows the average R 2 associated with fitting the additive effccts model, the
increment in R2 associated with the addition of the interaction term to the model, the F
statistic for incremental significance of the moderator term, the number of samples that did
not yield a significant increment in RZ ( P < O W ) , and the percentage of such samples.
The moderator variable in conditions 1 and 3 has a large probability of failing the
incremental significance test in a sample o f n = 200. Furthermore, conditions 1 and 3 yield
increments in R 2which some investigators have dismissed as not material when they happen
to be statistically significant (e.g. Stone, 1976; Stone et al., 1977). In condition 3, where the
 M 0 D E R A T E 1) R E G K E S S I 0 N A N A L. Y S I S 247

Hight -
(a)

GNS - 2 (High)

L O W L L . ~-1.- JI-I 2-1

-100 -50 0 50 100 -100 ~50 0 50 100 -100 50 0 50 100

Table 2. Sirmlrtion results (SOsrrtviplr~s,ti = 200 cucli)

Number and (percentage)

R* Increment Incremental of samples with
Condition (additive model) in R' F non-significant F

1 0.350 0.020 6.62

2 0.31 5 0.119 42.72
3 0.21 5 0.01 6 4.24
4 0,201 0.080 22.60

error variance is double that ofcondition I , the R 2 increments are even more marginal. Thc
small R' iiicremcnts from conditions I and 3 wcre associated with the modest moderator
elfects shown by the changes in the regression surface noted earlier.
The increments in K 2 for conditions 2 and 4 are larger than those for conditions I and 3 .
'I'he efkct or the larger error variance i n condition 4 compared with condition 2 is reflected
i n the smaller increnicnt i n R2 for this condition. The stronger
- moderator effects represented
... - . . . . .. . . . ~. . . .. 7

by conditions 2 and 4 wcre associated with an increase i n magnitude of the increment i n K'.
Although we know of no universal guidelines that would tell an investigator when an
increment in K 2 is material, the magnitude of'thc increments for conditions 2 a n d 4 probably
would attract some attention.
The following conclusions are suggested by the simulation results:
I . The moderator erects represented by conditions 1 and 3 were accompanied by small
increments in R 2 .
3. 'The stronger moderator effects represented by conditions 2 and 4 were accompanied by
larger increments in R 2 .
248 J O S E P H E. C H A M P O U X A N D W I L L I A M S. P E T E R S

3. Increases in the residual error term in the regression reduced the magnitude of the
increment in R2.For the stronger moderator conditions, the increment in R2 was
reduced from 12 to 8 per cent because of increased residual error.
4. Samples of n = 200 appear to be inadequate for detecting the weaker moderator effects.
The first three conclusions are not novel and we d o not present them as such. The
fourth conclusion would be no surprise to an experienced investigator, but has not been
noted in the existing literature about moderator variables. For this reason we discuss
separately required sample sizes for moderator research later in this paper.

A N A L T E R N A T I V E M E T H O D O F A S S E S S I N G T H E S T R E N G T H OF M O D E R A T O R EFFECTS

The magnitude of the moderator effects in the simulations shown in Fig. 1 d o not show
up dramatically in the results of the simulations. Focusing solely on the magnitude of the
increment in R2 to assess the strength of a moderator effect may hide other useful infor-
mation about the moderator variable. The increment in R2 only tells the investigator what
improvement in overall fit has happened due to the moderator variable.
It may be that modest increases in R 2are inherent in the nature of a moderator. At the
mean level of the moderator (GNS = 0), the slopes of the regression lines are similar to those
of the additive effects model. The difference in the slopes of the two models increases as one
moves toward the extremes of the moderator variable (GNS = - 2 o r + 2). The differences
in the regression surfaces are minimal near the centre, but material toward the ' edges ' of
the data.
The effect of GNS (the moderator variable) is to change the rate at which satisfaction
increases with MPS. We feel a measure of the rate of change in slope is more useful than the
incremental R 2for assessing the strength of the effect of the moderator variable.
Standardized slopes (betas) are often used in ordinary (additive model) multiple
regression as indicators of the comparative strengths of predictor variables. In the
moderator model, the slope of y with respect to x changes with the moderator variable z.
This is best expressed by
j = a + (b+ dz)x+ cz, (1)
where x and z are deviations from means and u =y. The changing slope o f j with respect to x
is ( h + dz). The standardized slope then is

+
beta 0,to x) = (b dz) -.
0,

0 Y

Equation (2) can be rewritten as

b e t a b tox)=fi+dz?. (3)
0 Y 6,
The first term is the familiar beta coefficient for a fixed slope 6. The second term, if
taken over one unit of z , is the change in standardized slope accompanying a unit change
in z.
A standardized measure of the strength o f z in moderating they to x slope is the change
in the standardized y to x slope accompanying a one standard deviation change in the
moderator variable, or

beta (moderator effect) = do,-.

ox (4)
UY
It is important to note that equation (4) is not equivalent to d(a,,/a,), which is the ' beta '
coefficient produced by packaged computer programs for the ' product ' variable xz.
 M O D E R A T E D R E G RE S S I 0 N A N A L Y S I S 249

Equation (4) is our proposed measure of the strength of moderator effects. This
measure expresses the standardized rate ofchange in slope because of a moderator variable.
When x and z are uncorrelated beta (moderator) will equal the square root of the increment
in R 2 associated with x z term.
In all simulations, h =0.01. The standardized slope for y with respect to x at mean z in
thc model is
*x 50
h- = o a - =0.5/ay.
*Y *Y
The simulations did not hold oyconstant. T h e y variance changed with changes in the
parameters defining the conditions in Table 1. The beta (moderator) effects in the simula-
tions were:
Beta (moderator)
Condition 1 50
0.002 (1.0)- __ =0.I I3
0.885
Condition 2 50
0,006 ( 1 ‘0)- = 0.3 I9
0.940
Condition 3 50
0.002 ( 1 ’0)- = 0.106
~

1.131
Condition 4 50
0.006 ( I ‘0) __ =0‘255
1,176
The bcta for moderator effects in conditions 2 and 4 vs. conditions 1 and 3 are roughly
in proportion to the absolute levels of Cl because the other paramcters are the samc or
comparable. An advantage of a standardized measure of moderator effects is in making
comparisons across studies where the standard deviations differ materially, or where
cntirelydiffcrent moderator variables are used. I t would also be useful within the same study
to compare among different moderator variables (Champoux & Peters, 1980).

AN A P P L I C A T I O N O b T H E S T A N D A R D I Z E D MEASURE O F MODERATOR E F F E C T S
Table 3 shows a comparative assessmcnt of the magnitude of moderator effccts in
selected job design studies. The table includes the incremental R2 from each study. I n all
cases the incrcmental R 2 was statistically significant at the 0.05 level or better. The incre-
mental R 2 s would lead many investigators to conclude, significance questions aside, that the
moderator effects are modest.
Approximating the beta (moderators) from the square roots of the incremental R2s in a
new light. For example, in the Abdel-Halim (1979) study the standardized slope of job
satisfaction with respect to MPS changed by 0.28 standard units/standard deviation change
in GNS. Across three standard deviations in GNS, the satisfaction to MPS slope changes by
0.84 standard units-which is certainly a substantial difference. In the Steers & Spencer
(1977) study, a three standard deviation units change in Need for Achievement (nAch) is
accompanied by a change of 0.6 standard units change in the job performance to MPS
slope. Such a change would be regarded as substantively significant.
The standardized measure also allows useful comparisons among different samples
and among different moderator variables. One can readily see the variation in moderator
effects among samples in Table 3 for a given class of moderator variable. It is also possible to
assess differences in the magnitude of effects of the different types of moderators.

SAMPLE SIZE A N D STATISTICAL POWER

So far we have been concerned with developing an informative measure of the strength
o f a moderator variable. Questions of statistical significance and power remain. Moderator
 L

Table 3 . Assessment of magnitude of moderator effects in selectedjob design studies

>
Magnitude of 3
Sample Dependent Moderator Increment moderator 3
Study Type of sample size variable variable(s) in R2 effect
X

Individual moderators
Abdel-Halim (1979) Manufacturing organization- 87 Growth satisfaction GNS 0.080 0,283
managerial and professional
Champoux (1980) R & D organization-various 1198 General satisfaction GNS 0.006 0.077
emplovees
Internal work GNS 0.004 0.063
motivation
Growth satisfaction GNS 0.014 0.1 18
Federal agency-subsample A 66 General satisfaction GNS 0.067 0,259
various employees
Mowday & Spencer (1981) State and County Government- 569 Absenteeism incidents nAch 0.020 0.1 41
clerical and health care delivery
employees
Absenteeism incidents nAut 0.037 0.1 92
Steers & Spencer (1977) Manufacturing organization- 115 Job performance nAch 0.040 0.200
managerial (supervisor ratings)
Stone (1976) Various organizations and types of 594 Work satisfaction Protestant 0.016 0.1 26
employees ethic
Stone et al. (1977) Manufacturing organization- 340 Work satisfaction nAch 0.019 0.138
various employees
 Co-worker satisfaction 0.040 0.200
Champoux (1981 ) R & D organization-B-various 1193 Growth satisfaction Co-worker satisfaction 0.007
employees
Champoux 81Howard (1985) Medical laboratories-medical 115 General satisfaction Social satisfaction 0.015 0.122
technologists
Growth satisfaction Supervisor satisfaction 0.013 0.1 14
Ferris & Gilmore (1984) County Government-nursing 94 General satisfaction Organizational climate 0.035 0.190
service employees 0
Katerberg e t a / . (1979) National Guardsmen 534 Work satisfaction Pay satisfaction 0.010 0.100 C
3
Civilian job involvement Overall context 0.010 0.1 00 *r
satisfaction t
4
Re-enlistment intentions Pay satisfaction 0.020 0.1 41 3
Overall context 0.010 0.1 00 C
satisfaction

Organization factors 2r
Champoux & Peters (1980) R & D organization-various 1152 Growth satisfaction Department 0.036 0.190 rA
rA
employees -
Note: Adapted from Champoux & Peters (1981, Table 1 )
0.000049.
252 J O S E P H E. C H A M P O U X A N D W I L L I A M S . P E T E R S

Table 4. Samples sizes required.for 0.975power to

detect moderators

Strength of moderator"
Total
R= 0.1 0.2 0.3

0.2 1280 320 142

0.3 1120 280 124
0.4 960 240 107
0.5 800 200 89
0.6 640 160 71
0.7 480 120 53
0.8 320 80 36

a For explanation, see text.

variables are tested in hierarchical multiple regression analysis using a product term for the
interaction. I t has become nearly universal to test significance by the incremental F test
which relates the standardized incremental variance explained by the moderator (product)
term lo the mean squared error estimate from the model which includes the moderator term
(Cohen & Cohen, 1975, pp. 109 11 I).
R'rnod -~-
R2add
F= (5)
I - R ~ , , ~ /-( m
~ I- I ) '
where m is the number of independent variables in the model which includes the moderator.
This F ratio has l / ( n - m - I ) degrees of freedom. It is indeed from this conventional
significance test that the use ofincremental R2 a s a measure of the magnitude of a moderator
effect arises.
The square root of ( 5 ) is a Student t statistic. When sample sizes exceed 30 or so, f is
close to normal. I n order to be 0.975 certain that an effect is significant at the conventional
0.05 level, the true effect must be at a z value of roughly 2.0 standard units in excess of 2.0,
or 4.0. Substituting, then, 42= 16 for F i n (3, and solving for sample size, yields a useful
sample size table for 0,975 power of detecting a moderator vs. the true strength of the
modera tor.
Table 4 shows the large sample sizes required to achieve good power to detect moder-
ators with a standardiLed strength of 0.1. Unless the other terms in the model explain
around 50 per cent of the variance, high power to detect a moderator with a standardized
beta effect of 0.2 requircs at least 200 observations. Few moderator studies we are aware of
revealed moderators with standardized strength as high as 0.3 (see Table 3). Such a strong
moderator would change a substantial negative standardized slope to a substantial positive
+
one over the range of the moderator from - 2.5 to 2.5 standard units.
It should be noted that measurement error inhibits the power of studies to detect
moderator effects (Arnold, 1982). To the extent that measurement errors are present, the
sample sizes in Table 4 would have to be increased.

DISCUSSION

After more than 25 years of debate, it now seems clear that moderated regression
analysis is the appropriate inferential procedure when the underlying theory postulates
differences in the form of relationship between two variables as a function of some moder-
ator variable (Saunders, 1956; Zedeck, 1971;Arnold, 1982). Themoderator variablemay be
 MODERATED REGRESSION ANALYSIS 253

continuous or discrete (Cohen & Cohen, 1975; Peters & Champoux, 1979; Champoux &
Peters, 1980). The flexibility of this form of analysis allows the examination of virtually any
type of moderator effect. While most uses of moderated regression analysis in the literature
have examined linear moderating effects, the procedure also allows examination of non-
linear interactions (Cohen & Cohen, 1975; Peters & Champoux, 1979; Champoux, 1980;
Champoux & Peters, 1980; Champoux, 1981). The results of the analysis allow the investi-
gator to cxamine both differences in levels of response, as well as differences in rate of
change of response, at different levcls of the moderator variable.
The general procedures to be followed are available in several standard references (e.g.
Netcr & Wasscrman, 1974; Cohen & Cohen, 1975) and will not be detailed here. The
moderated regrcssion procedure is widely accepted and statistically straightforward. The
approach is the application of the general linear model of mathematical statistics to prob-
lems of analysis of variance and the search for interaction or moderator effects (Cohen &
Cohcn. 1975).
lntcraction terms used in a hierarchical regression analysis frequently require taking
thc product of two or more variables that are also entered into the regression. Cohen (1978)
has put to rest any concern over the use ofproduct terms as variables in a multiple regression
analysis. He has shown that there is no adverse effect on proportions of explained variance
or appropriatc significance tests when the analysis involving product terms proceeds as he
suggests.
Because ofthc tendency to stop a moderated regression analysis at the evaluation of the
increment in R 2 , wc feel it is necessary to emphasize the subsequent stages of the analysis
that are needed. The test of significance of the increment in R 2following the introduction of
the intcraction term in the regression is essential to determine whether a statistically signifi-
cant interaction occurred in the data. The size of the increment in RZ,however, is not an
adequate description of the magnitude of the interaction effects.
If the increment in RZ from the introduction of the interaction term is statistically
significant, the investigator can then use the final regression equations to calculate slope
coefficients, values ofjl for selectcd levels of the moderator variable and betas for moderator
effects described earlier. An examination of the values of j will give the investigator an
appreciation of the changes in the level of the dependent variable for various levels of the
moderator variable. The slope coefficients will show the different rates of change in the
dependent variable for various levels of the moderator variable. Numerical values can be
arranged in tabular form for presentation and interpretation (e.g. Champoux, I98 I), or
displayed graphically as we have done here.
The beta for moderator effects allows the investigator to assess directly the magnitude
of interaction effects in his or hcr data. The measure expresses the standardized rate of
change in the slopes of the regression surface as a function of a moderator variable. We
interpret this measure as expressing the strength of the relationship between the moderator
variable and the form or the relationship between the independent and dependent variable.
As we have shown elsewhere (Champoux & Peters, 1980), the beta for moderator
etfects can be applied in analyses involving multiple moderator variables, including poly-
nomial interactions. Since the measure is standardized, an investigator can compare among
several moderator variables within an analysis. Such comparisons seem to be necessary
(Roberts & Click, 1981, p. 20) and would allow us to determine the relative utility of
alternative moderator variables. The measure also would be useful in inter-study compari-
sons (like our Table 3) where the investigator is interested in examining the combined results
of past research (Glass, 1977; Hunter et al., 1982).

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ABUEL-HALIM, A. A. (1979). Individual and interpersonal moderators of employee reactions to job charac-
teristics: A reexamination. Personnel Psycholo~y,32, I21 137.
254 J O S E P H E. C H A M P O U X A N D W I L L I A M S. P E T E R S

ABDBL-HALIM, A. A. (1981). Effects of role stress-job design technology interaction on employee work
satisfaction. Acudemy u/Management Juurnal, 24,26@ 272.
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