Many of the studies of contextual moderation of the variance components of substance use problems have examined dichotomous environmental variables (e.g. married vs. unmarried status, urban vs. rural environment). However, many identified risks for substance use are continuously distributed (e.g. family dysfunction, problem behavior). Therefore, we utilized a model that allows for a continuous moderator (Purcell, 2002) to examine the data for evidence of genotypic moderation in the presence of genotype-environment correlation. This model (presented in Figure 2) accounts for the covariance between PPD and DV by estimating both the magnitudes of genetic, shared environment, and non-shared environmental influences on the moderator (aM, cM, and eM, respectively in Figure 2) and the genetic, shared environment, and non-shared environmental influences shared by the two variables (aC, cC, and eC, respectively). A genetic component to PPD is evidence for a genetic contribution to a putative environmental risk. Furthermore, if this genetic risk is shared in common with DV, there is evidence that the same genes that predispose a person to affiliate with individuals they perceive as being delinquent also predispose one to substance dependence, thereby accounting for at least some of the correlation observed between them.