SEM’s better handling of measurement error is particularly
advantageous for testing moderation effects using a
product term approach, because the reliability of the product
term is generally much lower than the reliability of the
constituting variables in MRA (Busemeyer and Jones, 1983;
Jaccard and Wan, 1995). The lower the reliabilities, the
more difficult it is to detect moderating effects, resulting
in higher rates of type II errors (Jaccard and Turrisi, 2003).
Like traditional regression-based techniques,
covariance-based SEM offers two possibilities for analyzing
moderating effects: multi-sample analysis and the use
of a product-term.