Dependent Variables Under the Microscope: A New Method to Decompose and Comparatively Analyze Dependent Variables

Despite both regression analysis and structural equation modeling are prominent methods in many research areas, there is little research on methods to operationalize dependent variables. The well-established methods provide several very frequently used solutions for analyzing (complex) relationships between dependent and independent variables. Unfortunately, there is no method to study effects of an independent variable on several components of a (decomposed) dependent variable (e.g., different products of a brand, different distribution channels, or regular and promotional product prices). Thus, previous approaches for regression analysis and structural equation modeling are limited. With this research, I reduce these limitations by introducing a new method to decompose dependent variables into multiple components. To apply this new method, a three-step procedure is proposed: (1) Decomposition of the dependent variable using a categorical variable; (2) Sequential integration of the decomposed variables and calculation of the empirical results; (3) Output report and comparative interpretation of the results. Finally, some limitations are discussed and several directions for further research are given for research and practice in marketing and beyond.