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In the tutorial on testing moderating effect, the two approaches lead to different conclusions about the moderating effect of image on the relation between satisfaction and loyalty - in the first approach the moderating effect is significant and in the second approach it is not. Why is this so?
The product indicator and two-stage approaches lead to different results in terms of bias of the estimate and estimation of the standard error .
Thus, the two-stage approach is preferred for estimating the moderator effect since there is less bias in the estimation.
However, the product indicator method bring better accuracy in the standard error (and consequently confidence interval) estimation since multiple indicators are used.
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