This document discusses mediation, moderation, and how to analyze them in structural equation modeling. It defines mediation as occurring when a third variable intervenes between two related constructs, so that a change in one construct causes a change in the mediator variable, which then causes a change in the other construct. It also defines direct and indirect effects. It discusses how to determine if an effect is fully or partially mediated. It then defines moderation as a situation where the relationship between two constructs depends on a third variable, and discusses how to model and test for a moderating effect.

1. 1
https://www.youtube.com/watch?v=-lxec5eAt78

2. 2
Y2
Y3Y1
p1 p2
p3
 Mediation occurs when a third mediator variable intervenes between two
other related constructs.
 A change in the exogenous construct causes a change in the mediator
variable, which in turn, results in a change in the endogenous construct in
the model.

3. 3
Y2
Y3Y1
p1 p2
p3
 Direct effects are the relationship linking two constructs with a single
arrows.
 Indirect effects is a sequence of two or more direct effects and is
represented by multiple arrows
 Direct effects p3 betweenY1 andY3, and Indirect effect ofY1 onY3 in
the form of aY1  Y2 Y3 sequence.
 The indirect effect p1.p2 represents the mediating effect of the
constructY2 on the relationship betweenY1 andY3

4. Is pi.p2
significa
nt?
Is p3
significa
nt?
Is p3
significa
nt?
Is
p1.p2.p3
positive?
Complementary
(partial
mediation)
Direct only
(no mediation)
Indirect only
(full mediation)
No effect
(no mediation)
Competitive
(partial
mediation)
No
No No
No
Yes
Yes
Yes
Yes

5.  Full Mediation
The independent variables doesn’t have significant effect on the
dependent variables after inclusion of the mediation variables
Partial Mediation
The independent variables has a significant effect on the dependent
variables after inclusion of the mediation variables (Zhao, Lynch and Chen,
2010)

7. Significance Analysis of the Direct and Indirect Effect
Direct
Effect
95%
Confidence
Interval of
the Direct
Effect
t
Value
Significa
nce
(p<0.05)
?
Indirect
Effect
95%
Confidence
Interval of
the Direct
Effect
t
Value
Significa
nce
(p<0.05)
?
Indirect
Effect
Significance
?
Direct
Effect
Conclusion
COMP -> CUSL 0.033 (-0.025, 0.125) 0.887 0.376 0.090 (0.010, 0.207) 1.575 0.116 Yes No
Fully
Mediation
LIKE --> CUSL 0.033 (-0.126, 0.222) 0.362 0.717 -0.029 (-0.186, 0.173) 0.314 0.754 No No No Effect
(inlcude
zerro)

8. Customer
Satisfacti
on
Income
Customer
Loyalty
.
8
 Moderation describes a situation in which the relationship between two
construct is not constant but depends on the values of a third variable,
referred to as a moderator variable.
 The moderator variable changes the strength or even the direction of a
relationship between two construct in the model.

9. Customer
Satisfacti
on
Income
Customer
Loyalty
.
9
 The relationship between customer satisfaction and customer loyalty
differs as a function of the customer’s income.
 Income has negative effect on the satisfaction – loyalty relationship
 The higher the income the weaker the relationship between satisfaction
and loyalty.

10.  Measurement & Structural Model
 Size of the moderating effect
 Assess whether the interaction term is significant
 Assess moderator’s f2 effect size

11. 11
Contact Me
Firdha_beth@sbm-itb.ac.id