Notice that when C1i is confounded with Gi, either Gi or C1i might interact with Ei, and thus both the GiEi and the C1iEi term must be included in the properly specified model. This allows for the possibility that it is the covariate that interacts with the hypothesized environmental moderator rather than, or in addition to, the genetic polymorphism interacting with the hypothesized environmental moderator. If C1 is ethnicity, for example, one can imagine that individuals of a certain ethnic background are more sensitive to the environmental variable than individuals of another ethnic background. This could easily occur due to, e.g., cultural differences in reporting of environmental adversity, such that the more ‘sensitive’ ethnicity only reports environmental adversity when it is more severe and harmful. To the degree that there are genotype frequency differences between ethnicities, GiEi will be confounded with C1iEi. Alternatively, if C1 is socioeconomic status, subtle stratification not captured by self-report ethnicity, or a gene-environment correlation, may cause a relationship between the genetic polymorphism and C1, again leading to the GiEi term being confounded with the C1iEi
