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Structural Equation Modeling

Using AMOS

Structural equation modelling (SEM) grows out

of and serves purposes similar to multiple
regression, but in a more powerful way which
takes into account the modelling of interactions,
nonlinearities, correlated independents,
measurement error, correlated error items.
• tests theoretical hypothesis about causal
• tests relationships between observed and
unobserved variables
• combines regression analysis (path analysis) and
factor analysis
• researchers use SEM to determine whether a
certain model is valid
X1 a
Regression model:
Y=aX1+bX2+ε corr Y ε
Multiple dependent (Y) variables are not permitted
Each independent variable (X) is assumed to be measured without error
controlled experiments  measurement errors are negligible and uncontrolled variation
is at minimum
observational studies  all variables are subject to measurement error and
uncontrolled variation

Strong correlation (multicollinearity) may cause biased parameter estimates and inflated
standard errors
Indirect effects (mediating variables) cannot be included
The error or residual variable is the only unobserved variable
Items in SEM
• Indicators are observed variables, sometimes
called manifest variables or reference
variables, such as items in a survey
• Latent Variables are the unobserved variables
or constructs or factors which are measured
by their respective indicators.
• Exogenous variables are independents with no prior
causal variable (though they may be correlated with
other exogenous variables, depicted by a double-
headed arrow – note two latent variables can be
connected by a double-headed arrow (correlation) or a
single-headed arrow (causation) but not both.

• Endogenous variables are mediating variables

(variables which are both effects of other exogenous or
mediating variables, and are causes of other mediating
and dependent variables), and pure dependent
• The measurement model. The measurement
model is that part (possibly all) of a SEM
model which deals with the latent variables
and their indicators.
• A pure measurement model is a confirmatory
factor analysis (CFA) model.
• The measurement model is evaluated like any
other SEM model, using goodness of fit
• The null model. The measurement model is
frequently used as the “null model”. In the
null model, the covariances in the covariance
matrix for the latent variables are all assumed
to be zero.
• The structural model may be contrasted with the
measurement model. It is the set of exogenous and
endogenous variables in the model, together with the direct
effects (straight arrows) connecting them, and the
disturbance terms for these variables (reflecting the effects of
unmeasured variables not in the model).
Measurement model
δ1 X1 λx11

Latent Structural model

λx21 ξ1
X2 11
ϕ21 y1 ε1

η1 λy21
δ1 X3 λx32 γ12 y2 ε2
λx42 ξ2 β21
δ2 X4 γ22
y3 ε3
η2 λy42
δ1 λx53 γ23
X5 y4 ε4

λx63 ξ3
δ2 X6
Endogenous latent variable
(Exogenous) Exogenous latent variables