Syed Irfan Haider

ID # 2836

Course: QTIA

Submitted to: Sir Imtiaz Arif

STUCTURE
EQUATION
MODEL
(SEM)
Presented by:
Syed Irfan Haider
Where You can Learn More about SEM
Blunch (2008) Introduction to Structural
Equation Modeling Using SPSS and
AMOS. SAGE Publication Ltd.
Byrne (2000) Structural Equation
Modeling With AMOS LEA
publisher.
Kline (2005) Principles and Practice of
Structural Equation Modeling. (2nd
Edition) Guilford Press.
3
I. SEM Essentials:
1. SEM is a form of graphical modeling, and therefore, a system
in which relationships can be represented in either graphical
or equational form.

equational
form
y1 = γ11x1 + ζ1
1
graphical
11
form
x1 y1

2. An equation is said to be structural if there exists sufficient

evidence from all available sources to support the
interpretation that x1 has a causal effect on y1.
4
3. Structural equation modeling can be defined as the use of two
or more structural equations to represent complex hypotheses.

Complex x1 y3
Hypothesis
ζ3
y1 y2
ζ1 ζ2
Corresponding e.g.
Equations y1 = γ11x1 + ζ1
y2 = β 21y1 + γ 21x1 + ζ 2
y3 = β 32y2 + γ31x1 + ζ 3
5
 4. A Grossly Oversimplified History of SEM
Contemporary
Wright path analysis Joreskog
(1918) s is (1973) SEM
r a na ly
Spearman facto
Lee
(1904) (2007)

el s
d
are oo

a lt . t i n g
qu il h

mo d
i-s
r, ch lik
e

tes
Pearson Conven-
(1890s)
Fisher tional
(1922)
Statistics
Neyman & E. Pearson
(1934)
Bayes & LaPlace Bayesian
(1773/1774)
Raftery Analysis
MCMC (1993)
(1948-)

note that SEM is a framework and incorporates new statistical

techniques as they become available (if appropriate to its purpose) 6
5. Illustrations of fixed-structure protocol models:

Univariate Models Multivariate Models

x1
x1 y1
x2
x2 y2
x3 y1
x3 F y3
x4
x4 y4
x5
x5 y5

7
II. Structural Equation Models: Form and
Function
A. Anatomy of Observed Variable Models

8
 Some Terminology

path direct effect of x1 on y2

coefficients

21
x1 y2
11 21
2
exogenous y1
variable
1 endogenous
variables
indirect effect of x1 on y2
is 11 times 21
9
 model B, which has paths between all variables
is “saturated” (vs A, which is “unsaturated”)

A B
x1 y1 y2 x1 y1 y2
ζ1 ζ2 ζ1 ζ2
C D
x1 y2 x1 y2
ζ2 ζ2
x2 y1 x2 y1
ζ1 nonrecursive
ζ1
r
e
c
u
rs
i
v
e(
t
he
t
e
rm
re
c
ur
s
i
v
er
e
fe
r
st
o
t
he
ma
t
h
e
ma
t
ic
a
l
p
ro
p
er
t
y
t
ha
t
e
a
c
h
it
e
mi
na
s
e
ri
e
s
is
d
ir
e
c
tl
y
de
t
e
rm
i
ne
db
y
t
h
ep
r
ec
e
d
i
ng
i
t
em
)
.
10
 First Rule of Path Coefficients: the path coefficients for
unanalyzed relationships (curved arrows) between
exogenous variables are simply the correlations
(standardized form) or covariances (unstandardized form).

x1 x2 y 1
x1 -----------------------------
.40 y1 x1 1.0
x2 0.40 1.0
x2
y1 0.50 0.60 1.0

11
Second Rule of Path Coefficients: when variables are
connected by a single causal path, the path
coefficient is simply the standardized or unstandardized
regression coefficient (note that a standardized regression
coefficient = a simple correlation.)

11 = .50 21 = .60

x1 y1 y2

x1 y1 y2
-------------------------------------------------
x1 1.0
y1 0.50 1.0
y2 0.30 0.60 1.0
 (gamma) used to represent effect of exogenous on endogenous.
 (beta) used to represent effect of endogenous on endogenous.
12
 Third Rule of Path Coefficients: strength of a
compound path is the product of the coefficients along
the path.

.50 .60
x1 y1 y2

Thus, in this example the effect of x1 on y2 = 0.5 x 0.6 = 0.30

Since the strength of the indirect path from x1 to y2 equals the

correlation between x1 and y2, we say x1 and y2 are
conditionally independent.

13
What does it mean when two separated variables
are not conditionally independent?

x1 y1 y2
-------------------------------------------------
x1 1.0
y1 0.55 1.0
y2 0.50 0.60 1.0

r = .55 r = .60
x1 y1 y2

0.55 x 0.60 = 0.33, which is not equal to 0.50

14
 SEM is Based on the Analysis of Covariances!
Why? Analysis of correlations represents loss of information.
illustration with regressions having same slope and intercept
100 A 100 B
80 80
60 60
y y
40 40
20 r = 0.86 20 r = 0.50
0 0
0 10 20 30 0 10 20 30
x x

Analysis of covariances allows for estimation of

both standardized and unstandardized parameters.

15
 Model Identification - Summary
1. For the model parameters to be estimated with unique
values, they must be identified. As in linear algebra, we
have a requirement that we need as many known
pieces of information as we do unknown parameters.
2. Several factors can prevent identification, including:
a. too many paths specified in model
b. certain kinds of model specifications can make
parameters unidentified
c. multicollinearity
d. combination of a complex model and a small
sample

16
RESEARCH
PAPER
&
AMOS
17