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# Re: st: What is the effect of centering on marginal effects?

 From John Antonakis To statalist@hsphsun2.harvard.edu Subject Re: st: What is the effect of centering on marginal effects? Date Fri, 03 Aug 2012 04:59:26 +0200

```Hi Kit:

```
I don't believe you are using the right vif. Should it not be the -uncentered- option in vif for both regressions below? In this case the vifs are the same.
```
Also see:

```
Echambadi, R., & Hess, J. D. 2007. Mean-centering does not alleviate collinearity problems in moderated multiple regression models. Marketing Science, 26(3): 438-445.
```
```
Kromrey, J. D., & Foster-Johnson, L. 1998. Mean centering in moderated multiple regression: Much ado about nothing. Educational and Psychological Measurement, 58(1): 42-67.
```
Best,
J.

__________________________________________

Prof. John Antonakis
Department of Organizational Behavior
University of Lausanne
Internef #618
CH-1015 Lausanne-Dorigny
Switzerland
Tel ++41 (0)21 692-3438
Fax ++41 (0)21 692-3305
http://www.hec.unil.ch/people/jantonakis

Associate Editor
__________________________________________

On 02.08.2012 14:38, Christopher Baum wrote:
> <>
> On Aug 2, 2012, at 2:33 AM, Alessandro wrote:
>
>> Centered and uncentered models are algebraically equivalent (see
>> Brambor et al, "Understanding Interaction Models: Improving Empirical
>> Analyses" 2006). The only difference is that, in an uncentered model,
>> the coefficient of b1 corresponds to the marginal effect of a one unit
>> change in X when the conditioning variable Z is zero, while the
>> corresponding coefficient on the centered model gives you the marginal
>> effect of a change in X when Z is at its mean.
>>
>> This means that centering variables will not reduce multicollinearity
```
> I don't think this is quite true. See what happens to the VIF when the interacted variables are centered. Also note that the elasticity
```> estimates change, and become very imprecise with centering.
>
> sysuse auto, clear
> qui reg price length weight c.length#c.weight
> estat vif
> margins, eyex(_all)
> // center from SSC (Jann)
> center price length weight
> qui reg c_price c_length c_weight c.c_length#c.c_weight
> estat vif
> margins, eyex(_all)
>
> Kit
>
>
```
> Kit Baum | Boston College Economics & DIW Berlin | http://ideas.repec.org/e/pba1.html > An Introduction to Stata Programming | http://www.stata-press.com/books/isp.html > An Introduction to Modern Econometrics Using Stata | http://www.stata-press.com/books/imeus.html
```>
>
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```