We have been developing weighted effect coding in an ongoing series of publications (hint: a publication in the R Journal will follow). To include nominal and ordinal variables as predictors in regression models, their categories first have to be transformed into so-called ‘dummy variables’. There are many transformations available, and popular is ‘dummy coding’ in which the estimates represent deviations from a preselected ‘reference category’.
To avoid choosing a reference category, weighted effect coding provides estimates representing deviations from the sample mean. This is particularly useful when the data are unbalanced (i.e., categories holding different numbers of observation). The basics of this technique, with applications in R, were detailed here.
In a new publication, we show that weighted effect coding can also be applied to regression models with interaction effects (also commonly referred to as moderation). The weighted effect coded interactions represent the additional effects over and above the main effects obtained from the model without these interactions.
To apply the procedures introduced in these papers, called weighted effect coding, procedures are made available for R, SPSS, and Stata. For R, we created the ‘wec’ package which can be installed by typing:
Grotenhuis, M., Ben Pelzer, Eisinga, R., Nieuwenhuis, R., Schmidt-Catran, A., & Konig, R. (2017). A novel method for modelling interaction between categorical variables. International Journal of Public Health, 62(3), 427–431. http://link.springer.com/article/10.1007/s00038-016-0902-0
Grotenhuis, M., Ben Pelzer, Eisinga, R., Nieuwenhuis, R., Schmidt-Catran, A., & Konig, R. (2017). When size matters: advantages of weighted effect coding in observational studies. International Journal of Public Health, 62(1), 163–167. http://doi.org/10.1007/s00038-016-0901-1