47. SPSS AMOS - Moderation with Categorical Independent and and Categorical Moderator

Moderation analysis in AMOS can handle a categorical independent variable (type of bank) and a categorical moderator (job rank) when the dependent variable (reliability of service) is continuous—but the key is how interaction terms are built. Here, “type of bank” has two categories (public coded 0, private coded 1), while “job rank” has three categories (junior, middle, senior). Junior is treated as the reference category, so the estimated effects for middle and senior are interpreted relative to junior, and the private-vs-public comparison is interpreted relative to the public group.

After setting up the model, the analysis requires interaction terms between the bank type dummy and each non-reference category of the moderator. Practically, that means creating dummy variables for job rank (junior/middle/senior) and then computing interaction variables such as (type × middle) and (type × senior), while skipping interactions involving the reference category (junior). These interaction terms are what allow AMOS to test whether the relationship between bank type and reliability changes across job-rank groups.

The output interpretation starts with main effects. Middle and senior show significant positive differences in reliability compared with junior, meaning employees at those ranks are associated with higher reliability scores than the reference group. The bank-type main effect is also positive: private banks (coded 1) have higher reliability than public banks (coded 0). In this coding scheme, a positive coefficient indicates the category coded as 1 has higher reliability than the reference category; a negative coefficient would have implied the opposite.

The moderation results come from the interaction terms. The interaction involving bank type and middle rank is significant and negative. That combination implies the bank-type effect on reliability is weaker (and reliability lower in private banks) when the service is delivered by middle-level employees compared with junior-level employees. Put differently: private-bank reliability is relatively higher when served by junior employees, but it drops when served by middle employees. The interaction for senior is not significant, indicating no meaningful moderation effect for senior employees—bank type’s relationship with reliability appears similar for senior and junior.

To validate and make the moderation pattern easier to understand, the workflow also uses follow-up checks in SPSS: splitting the dataset by job rank and examining correlations and group comparisons by bank type. These checks align with the moderation coefficients—private banks show higher reliability for junior employees, while reliability is lower for middle employees in private banks compared with junior employees. Finally, the same moderation logic can be replicated using the PROCESS macro with a multicategorical moderator (model 1), where the macro’s W1/W2 terms correspond to middle and senior groups and the interaction estimates can be compared against AMOS results. The takeaway is that categorical-by-categorical moderation is feasible in AMOS, but correct dummy coding and interaction construction (excluding the reference category) determine whether the moderation test is valid.