Nonlinear Indicator-Level Moderation in Latent Variable Models.

Linear, nonlinear, and nonparametric moderated latent variable models have been developed to investigate possible interaction effects between a latent variable and an external continuous moderator on the observed indicators in the latent variable model. Most moderation models have focused on moderators that vary across persons but not across the indicators (e.g., moderators like age and socioeconomic status). However, in many applications, the values of the moderator may vary both across persons and across indicators (e.g., moderators like response times and confidence ratings). Indicator-level moderation models are available for categorical moderators and linear interaction effects. However, these approaches require respectively categorization of the continuous moderator and the assumption of linearity of the interaction effect. In this article, parametric nonlinear and nonparametric indicator-level moderation methods are developed. In a simulation study, we demonstrate the viability of these methods. In addition, the methods are applied to a real data set pertaining to arithmetic ability.