Mean Centering Helps Alleviate 'Micro' But Not 'Macro' Multicollinearity

Behavior Research Methods, 48, 1308-1317 (2016)

Atlas of Science, 2016

32 Pages Posted: 29 Jul 2019

See all articles by Dawn Iacobucci

Dawn Iacobucci

Vanderbilt University - Marketing; Vanderbilt University - Marketing

Matthew Schneider

Northwestern University - Integrated Marketing Communications Program

Deidre Popovich

Rawls College of Business, Texas Tech University

Yiorgos Bakamitsos

Stetson University

Date Written: December 2016

Abstract

There seems to be confusion among researchers regarding whether it is good practice to center variables at their means prior to calculating a product term to estimate an interaction in a multiple regression model. Many researchers use mean centered variables because they believe it’s the thing to do or because reviewers ask them to, without quite understanding why. Adding to the confusion is the fact that there is also a perspective in the literature that mean centering does not reduce multicollinearity. In this article, we clarify the issues and reconcile the discrepancy. We distinguish between "micro" and "macro" definitions of multicollinearity and show how both sides of such a debate can be correct. To do so, we use proofs, an illustrative dataset, and a Monte Carlo simulation to show the precise effects of mean centering on both individual correlation coefficients as well as overall model indices.We hope to contribute to the literature by clarifying the issues, reconciling the two perspectives, and quelling the current confusion regarding whether and how mean centering can be a useful practice.

Keywords: Mean centering, Multicollinearity, Moderated multiple regressions, Interactions in regression

Suggested Citation

Iacobucci, Dawn and Iacobucci, Dawn and Schneider, Matthew and Popovich, Deidre and Bakamitsos, Yiorgos, Mean Centering Helps Alleviate 'Micro' But Not 'Macro' Multicollinearity (December 2016). Behavior Research Methods, 48, 1308-1317 (2016), Atlas of Science, 2016, Available at SSRN: https://ssrn.com/abstract=3425997

Dawn Iacobucci (Contact Author)

Vanderbilt University - Marketing ( email )

Nashville, TN 37203
United States

Vanderbilt University - Marketing ( email )

Nashville, TN 37203
United States

Matthew Schneider

Northwestern University - Integrated Marketing Communications Program ( email )

Evanston, IL
United States

Deidre Popovich

Rawls College of Business, Texas Tech University ( email )

Lubbock, TX 79409
United States

Yiorgos Bakamitsos

Stetson University ( email )

Gulfport, FL 33707
United States

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