Structural Equation Modeling (SEM)

The Structural Equation Modeling or SEM is a second

generation multivariate statistical analysis developed for
analyzing the inter-relationships among multiple
variables in a model simultaneously.
SEM is a powerful statistical technique to solve the
following requirements:
1) Analyzing the model with latent constructs
2) Running the Confirmatory Factor Analysis (CFA)
3) Analyzing multiple equations simultaneously
4) Analyzing regressions with multicollinearity problem
5) Analyzing the path analysis with multiple dependents
6) Estimating the correlation and covariance in a model
7) Modeling the inter-relationships simultaneously in a model
8) Modeling and testing the mediating variables in a model
9) Analyzing and testing the moderating variables in a model

HISTORY OF MULTIVARIATE ANALYSIS METHODS

Type of Analysis
Exploratory
First Generation
(1900-1990)

Second Generation
(1990-Now)

1. Exploratory Factor
Analysis (EFA)
2. Cluster Analysis
3. Multidimensional
Scaling

Confirmatory
1. ANOVA
2. Logistic Regression
3. Multiple Regression

Variance Based SEM

Covariance Based SEM
Partial Least Square (PLS) (AMOS, LISRELL, etc)
Confirmatory Factor
Analysis (CFA)
(AMOS, LISRELL, etc)

AMOS is an acronym for Analysis of Moments Structures. This is

one of the newest software developed for Structural Equation
Modeling (SEM). The researchers could employ AMOS Graphic to
model and analyze the inter-relationships among latent constructs
effectively, accurately, and efficiently. More importantly, the
multiple equations of inter-relationships in a model are computed
simultaneously.

Comparison between Variance-Based SEM

and Covariance-Based SEM
Estimator
Used

VB-SEM

OLS:

PLS

Ordinary

Research
Objective

Statistical
Approach

Model
Assessment

-Exploratory

Develop based

No Specific

in Nature

on Non-

Measure to

Parametric

Assess the

Least Squares -Predicting

-Theory

Approach

Development

the Model

CB-SEM

MLE:

AMOS

Maximum

in Nature

on Parametric

Likelihood

-Theory

Approach

Estimator

Testing

-Confirmatory Develop based

-Comparing
Theories

Goodness of

Produced the
Fitness
Indexes to
Assess the
Goodness of
the Model