Appropriate Moderated Regression and Inappropriate Research Strategy: A Demonstration of Information Loss Due to Scale Coarseness

Paunonen and Jackson (1988) demonstrated that stepwise moderated regression provides a test of interaction effects that protects the nominal Type I error rate. However, the stepwise procedure has also been characterized as failing to detect interaction effects in empirical studies. This issues has led to questions regarding the method's statistical power in applied research. It is demonstrated that, because of a research strategy frequently used in empirical investigations, the probability of Type II error in detecting a true interaction effect is unknown.

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