A mediating variable, also known as a mediator variable, is a hypothetical variable that explains the mechanism or process that underlies an observed relationship between an independent variable and a dependent variable). Rather than a direct causal relationship between the independent variable and the dependent variable, a mediation model proposes that the independent variable influences the mediator variable, which in turn influences the dependent variable). In other words, a mediator variable explains the relationship between two other variables.

For example, sleep quality (an independent variable) can affect academic achievement (a dependent variable) through the mediator of alertness. Mediation analysis tests whether a variable is a mediator using one of the two main methods – Analysis of Variance (ANOVA) or linear regression analysis. Mediation may either be partial or complete. Taking the mediator out of the model in complete mediation eliminates the relationship between an independent and dependent variable. This is because the mediator thoroughly explains the relationship between a dependent and an independent variable.

In order for a variable to be considered a mediator variable, it must meet certain conditions. First, the change in the level of the independent variable must significantly account for variation in the other variable. Second, there must be a significant relationship between the mediator and the dependent variable). Third, the mediator variable must be significantly related to the independent variable). If these conditions are met, the variable is considered a mediator variable.

It is important to distinguish between mediator variables and moderator variables. A mediator variable explains the process through which two variables are related, while a moderator variable affects the strength and direction of that relationship. In other words, a mediator variable is in a causal sequence between two variables, whereas a moderator is not part of a causal sequence between the two variables.

In summary, a mediating variable is a hypothetical variable that explains the mechanism or process that underlies an observed relationship between an independent variable and a dependent variable. It is part of the causal pathway of an effect, and it tells you how or why an effect takes place.