I ran a type III ANOVA on a model of this kind: gls(y~x1+x2+x3). I found that both x2 and x3 are significant. However, if I drop x3 from the analysis (gls(y~x1+x2), then no independent variable is significant. If I drop x2 instead (gls(y~x1+x3), x3 is significant.

So, basically, the effect of x2 on y is influenced by x3. I think this is the correct interpretation. My problem is that x3 has two sates, one of which has 53 individuals and the other has 6. The fact that one of the groups of x3 has just 6 members could be confusing the analysis, I think.

What are your thoughts on this?

Thanks in advance.