Structural equation

modelling
SUBTITLE
What is Structural Equation Modelling?
• SEM is a general statistical modelling technique used to establish relationship
among variables.

• SEM is a confirmatory data analysis technique, i.e.

 it tests models that are conceptually derived, beforehand
 it tests if the theory fits the data

• SEM can be thought of as a combination of factor analysis and multiple regressiona

 it can simultaneously test measurement and structural relationships

• SEM is a family of related procedures. It is alternately defined by the following terms

 Path Analysis, Path Modelling, Causal Modelling, Analysis of Covariance Structures,
Latent Variable Analysis, Linear Structural Relations
 Covariance: At the Heart of SEM
• Covariance is a measure of how much two random variables change together.
Alternately, it can be defined as the strength of association between the two
variables and their variabilities.

• The basic statistic of SEM

 Understanding patterns of correlations among a set of variables
 Explain as much of their variance as possible with the model specified
 Logic of SEM
• Every theory (model) implies a set of correlations
 And why variables are correlated

• Necessary (but insufficient) condition for the validity of the theory is that it should be
able to reproduce the correlations that are actually observed
 i.e., the implied covariance matrix should = the actual covariance matrix
 Why SEM over Regression?
• Regression allows for only a single dependent variable, whereas SEM allows for
multiple dependent variables.

• SEM allows for variables to correlate, wawhereas regression adjusts for other
variables in the model.

 Regression assumes perfect measurement, whereas SEM accounts for measurement

error.
 USES OF SEM
• Theory testing
 Strength of prediction/association in models with multiple DVs
 Model fit
• Mediation/tests of indirect effects
• Group differences
 Multiple-sample analysis
• Longitudinal models
• Multilevel nested models
SEM: Basic Concepts
• Measured Variable or Indicator Variable
• Latent Variable
• Measurement Model
• Structural Model
Basic Concepts: Measured Variable/Indicator
Measured variable(s) are the variables that are actually measured in the study.

Latent Variable

Measured Variable 1 Measured Variable 2 Measured Variable 3

Basic Concepts: Latent Variable
• Intangible constructs that are measured by a variety of indicators
(more is better!)

Latent Variable

Measured Variable 1 Measured Variable 2 Measured Variable 3

Basic Concepts: Measurement Model
• The measurement model can be described as follows. It shows the
relationship between a latent variable and its measured
items(variables).

Latent Variable

Measured Variable 1 Measured Variable 2 Measured Variable 3

Basic Concepts: Structural Models
• Often used to specify models in SEM
 Causal flow is from left to right; top to bottom
• Straight arrows represent direct effects
• Curved arrows represent bidirectional “correlational”
relationships
• Ellipses represent latent variables
• Boxes/rectangles represent observed variables
Example: Structural Models
Variants of Structural Equation
Modelling
•Confirmatory Factor Analysis (CFA)
•Path Analysis with observed variables
•Path analysis with latent variables
Confirmatory Factor Analysis
“Measurement Model”
• Tests model that specifies relationships between variables (items) and
factors
 And relationships among factors

• Confirmatory
 Because model is specified a priori
Example: Oblique CFA Model
Confirmatory vs. Exploratory Factor
Analysis
• In CFA the model is specified a priori
 Based on theory

• EFA is not a member of the SEM family

 Includes a class of procedures involving centroids, principal components, and
principal axis factor analysis
 Does not require a priori hypothesis about relationships within your model
 Inductive vs. deductive approach
 More restrictions on the relationships between indicators and latent factors
Example: Oblique EFA Model
Observed Variable Path Analysis
(OVPA)
• Tests only a structural model
 Relationships among constructs represented by direct measured
(observed variables)
 i.e., each “box” in model is an idem, subscale, or scale

• Analogous to a series of multiple regressions

 But, with MR, we would need k different analyses, where k is # of
DVs
 With SEM, can test entire model at once
Example: OVPA
Latent Variable Path Analysis (LVPA)
• Simultaneous test of measurement and structural parameters
• CFA and OVPA at same time

• LVPA models incorporate….

• Relationships between observed and latent variables (i.e., measures and factors)
• Relationships between latent variables
• Error & disturbances/residuals
Example: LVPA
Data Considerations
 Sample Size
• SEM is a large-sample technique
• The required Sample size needed depends on….
 Complexity of model

 Ratios of sample size to estimated parameters

ranging from
 5:1 to 20:1 (Bentler & Chou, 1987; Kline, 2005)
 Data Quality
 Larger samples for non-normal data
CFA Models: Important Steps
• Model Specification
• Model Identification
• Model Estimation
• Assessment of Model Fit
• Model Re-specification
Step 1: Model Specification
• SEM is a confirmatory technique and it
Needs a model that delineates the relationships among variables

Requires a model that is based on theory (Bollen & Long, 1993)

Step 1: Model Specification
• Exogenous variables
• Variables whose causes are unknown and/or not included in the
model
• Variables that explain other variables in the model (i.e. independent
variables (IVs))

• Endogenous variables
• Variables that serve as DVs in a model
• May also serve as IVs
Step 2: Model Identification
• Model must be specified so that there are enough pieces of information to give unique
estimates for all parameters

• SEM involves estimating unknown parameters (e.g., factor loadings, path coefficients)
based on known parameters (i.e., covariances)

• Identification involves whether a unique solution for a model can be obtained

• Requires more known vs. unknown parameters

• Identification is a property of the model, not the data

 Does not depend on sample size
 i.e., if a model is not identified, it remains so regardless of whether the sample size is
100, 1000, 10,000, etc.
Step 3: Model Estimation
• Over-identified models have infinite # of solutions.
• Parameters need to be estimated based on a mathematical criterion.
• Goal is to minimize differences between the observed and implied covariance
matrices.
• Process begins with initial estimates- start values.
• Is an iterative process – will stop when a minimum fitting criterion is
reached.
 When the difference between the observed and implied covariance
matrices are minimized
Step 4: Assessing Model Fit

• Absolute fit
• Relative (Comparative) fit
Common Absolute Fit Indices
• Model X2*
• Non-significant X2 (p>0.05) indicates good fit

• Root Mean Squared Error of Approximation (RMSEA)

• Acceptable fit < 0.10; good fit < 0.05

• Goodness of Fit (GFI)

• > 0.90 is considered good fit
Common Relative Fit Indices

• Normed Fit Index (NFI)

• Incremental Fit Index (IFI)
• Comparative Fit Index (CFI)

• All range 0-1

• Generally, >0.90 is considered good
SEM Model Fit: Rules of Thumb
• Will often see/hear reference to 0.90 or above indicating acceptable model
fit, for indices such as GFI, CFI, NFI, etc.
 Typically cite Bentler & Bonett (1980) for this assertation

• Basis for this is rather thin (Lance et al., 2006)

• What Bentler and Bonett (1980) actually said:

 “experience will be required to establish values of the indices that are
associated with various degrees of meaningfulness of results. In our
experience, models with overall fit indices of less than 0.90 can usually
be improved substantially” (Bentler & Bonett, 1980, p. 600).
Step 5: Model Re-specification/Modification
• Goal is to improve model fit – changing the model to fit the data

• Caveats
 Modifications are post hoc & capitalize on chance!

• General guidelines
 Must be theoretically consistent
 Must be replicated with new data
Evaluating Your Model
• Theoretical/clinical meaning

 Guiding principle
• Residuals and implied correlations
 Discrepancies between sample covariance matrix and
those implied by the model
• Tests of path coefficients

 Direction, magnitude
• Absence of numerical problems

 Direction and magnitude of residuals

 Pattern of standardized residuals (z-scores)