Title: Mediation analysis with categorical independent variables

Authors: Hyoung-Kil Kang; Eunsoon Lee

Addresses: Department of Recreation and Leisure Services Administration, Southern Wesleyan University, Central, SC 29630, USA. ' Department of Communication Studies, University of Minnesota, Minneapolis, MN 55455, USA

Abstract: The primary goal of mediation analysis is to explicate the mechanism that underlies an observed relationship between an independent variable and a dependent variable by including a third explanatory variable, known as a mediator variable. While the concept of mediation is theoretically appealing, our literature study indicates that there has not been a comprehensive research work on how a categorical variable is assessed in the statistical mediation analysis of time and perceived quality of life. The main objective of this paper is two-fold. First, this paper develops conceptual justifications of employing psychological variables to represent unique constructs with as little conceptual overlap as possible in the mediation analysis to prevent multicollinearity issues. Second, a modified approach is then proposed to estimate relative direct and indirect effects as well as relative total effects between a categorical independent variable and a dependent variable. A numerical example is provided to facilitate the proposed approach.

Keywords: categorical independent variables; dummy coding; relative indirect effect; relative total effect; reference category; statistical mediation analysis; mediator variables; psychological variables; dependent variables.

DOI: 10.1504/IJEDPO.2012.049285

International Journal of Experimental Design and Process Optimisation, 2012 Vol.3 No.2, pp.178 - 197

Available online: 29 Sep 2012 *

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