Mediation Analysis and Categorical Variables: The Final Frontier

Abstract

Many scholars are interested in understanding the process by which an independent variable affects a dependent variable, perhaps in part directly and perhaps in part indirectly, occurring through the activation of a mediator. Researchers are facile at testing for mediation when all the variables are continuous, but a definitive answer had been lacking heretofore as to how to analyze the data when any of the variables — independent, mediator, and/or dependent — are categorical. This paper describes the problems that arise as well as potential solutions. In the end, a solution is recommended that is both optimal in its statistical qualities as well as practical and easily implemented: compute zMediation.

Keywords: mediation analysis