SEM Note

Slide 2: What is Structural Equation Modeling?

 Definition: SEM is a statistical technique used to test and estimate causal

relationships using a combination of statistical data and qualitative causal
assumptions.
 Brief history: Originated in the field of psychometrics in the 1970s, but has since been
adopted in various disciplines.
 Purpose: Used to assess the validity of theoretical models by examining the
relationships between multiple variables.

Slide 3: Key Concepts in SEM

 Latent variables: Variables that are not directly observed but are inferred from other
variables.
 Observed variables: Variables that are directly measured.
 Measurement model: The part of the SEM that specifies how latent variables are
measured by observed variables.
 Structural model: The part of the SEM that specifies the relationships between latent
variables.

Slide 4: The SEM Equation

 Representation: Y = Λyξ + ε (measurement model), ξ = Bξ + Γx + ζ (structural model)

 Explanation: Λy is the factor loading matrix for Y indicators, ξ is the vector of latent
variables, ε is the vector of measurement errors, B is the matrix of coefficients for the
relationships among ξ, Γ is the matrix of coefficients for the effects of x on ξ, and ζ is
the vector of structural errors.

Slide 5: Path Diagrams

 Introduction: Path diagrams are visual representations of SEM models.

 Symbols: Squares/circles represent observed/latent variables, arrows represent causal
relationships, double-headed arrows represent correlations.
 Example: [Include a simple path diagram with annotations]

Slide 6: Model Specification

 Steps: (1) Define the theoretical model, (2) Convert the theoretical model into a path
diagram, (3) Translate the path diagram into equations, (4) Specify the measurement
model, (5) Specify the structural model.
 Identification issues: A model is identified if it is possible to obtain a unique solution
for the parameter estimates.

Slide 7: Estimation Methods

 Maximum Likelihood Estimation: The most common method, based on the likelihood
of the observed data given the model.
 Generalized Least Squares: An alternative method that minimizes the discrepancy
between the sample and model-implied covariance matrices.
 Comparison: MLE is preferred for its statistical properties, but GLS can be used for
models with non-normal data.

Slide 8: Model Evaluation

 Goodness-of-fit indices: RMSEA (Root Mean Square Error of Approximation), CFI

(Comparative Fit Index), TLI (Tucker-Lewis Index).
 Model comparison: Nested models can be compared using chi-square difference
tests, non-nested models can be compared using information criteria (e.g., AIC, BIC).

Slide 9: SEM Software

 AMOS: Graphical interface, easy to use for beginners.

 LISREL: One of the first SEM software, more complex interface.
 Mplus: Advanced software with a wide range of models and estimation methods.

Slide 10: Applications of SEM

 Psychology: Examining the relationships between mental health variables.

 Marketing: Assessing the impact of advertising on consumer behavior.
 Education: Investigating the factors influencing student achievement.

Slide 11: Challenges and Limitations

 Challenges: Model identification, multicollinearity, sample size requirements.

 Limitations: SEM is based on correlational data, so causal inferences should be made
cautiously.

Slide 12: Conclusion

 Recap: SEM is a powerful statistical technique for testing theoretical models.

 Future directions: Integration with machine learning, Bayesian SEM, and complex
longitudinal models.
 Slide 13: References

 List of key references and further reading materials.