EDUC 102- STATISTICS

STRUCTURAL
EQUATION
MODELING
BARRIOS, DENJAY
MARIKIT, ILONA JANE D.
ORIO, JULITO A.
YPON, JULIUS JONATHAN M.
 What is SEM?
× According to Hoyle, × It is a methodology for
Structural equation representing,
modeling may also be estimating, and testing
explained as a a theoretical network
comprehensive statistical of (mostly) linear
approach to testing relations between
hypotheses exploring variables (Rigdon,
relations between observed 1998).
and latent variables.

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 Components of a Structural
Equation Model:  
× Structural Equation Models are divided into
two parts: a measurement model and a
structural model.
1. The measurement model deals
with the relationships between
measured variables and latent
variables.

2. The structural model deals with

the relationships between latent
variables only.
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 The diagram below
shows an example of a
Structural Equation
Model (taken from
Hoyle 1995, p. 26

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Hello!

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 Useful for Research Questions that..

× Involve complex, multi- × Focus on indirect

faceted constructs that (mediated) as well as
are measured with direct effects of
error variables on other
variables

× That specify ‘systems’

of relationships rather
than a dependent
variable and a set of
predictors
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 Limitations of Sems:
× Once again, SEM cannot test directionality in
relationships. The researcher’s choice of variables
and pathways represented will limit the structural
equation model’s ability to recreate the sample
covariance and variance patterns that have been
observed in nature. Because of this, there may be
several models that fit the data equally well.

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 Also Known as
× Covariance
× Analysis of Structure
Linear Analysis
Structural × Analysis of
Relationships Moment
(LISREL) Structures
× Causal Modeling

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 Software for SEM
There are a lot of software Other Software packages that can fit
packages that can fit SEMs. A SEMs are the ff:
good  Mplus, EQS, Amos, Calis, Mx,
site to access these from is: SEPATH, Tetrad, R, stata
http://www.gsu.edu/~mkteer/so  Some have downloadable student
ftware.html The original and versions
best known is Lisrel, developed  
by Joreskog and Sorbom It can
be downloaded at
<http://www.spss.com/softwar
e/spss/base/amos/>.
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 SEM can be thought of as Path Analysis using
Latent Variables
 A latent variable is a variable that cannot be
observed directly and must be inferred from
measured variables. Latent variables are implied
by the covariances among two or more
measured variables. They are also known as
factors (i.e., factor analysis), constructs or
unobserved variables.

 Most social scientific concepts are

not directly observable, e.g.
intelligence, social capital.

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 “
Quotations are commonly printed as a means
of inspiration and to invoke philosophical
thoughts from
11 the reader.
 This makes them hypothetical or ‘latent’ constructs.
 We can measure latent variables using observable indicators
 We can think of the variance of a questionnaire item as being
caused latent construct we want to measure – Other factors
(error/unique variance)
 The many, as we say, are seen but not known, and the ideas
are known but not seen” (Plato, The Republic). Latent refers
to the fact that even though these variables were not
measured directly in the research design they are the
ultimate goal of the project.
 These relationships are not given by the data, but are
modeled by the analyst/researcher based on theory and
previous research. It can be understood as an extension of
GLM in which the predictor is a latent variable and the
outcomes are the indicators. 12
 Benefits of Latent Variables:
 Most social concepts are complex and multi- faceted
 Using single measures will not adequately cover the
full conceptual map
 Removes/reduces random error in measured construct
 Random error in dependent variables -> estimates
unbiased but less precise
 Random error in independent variables -> attenuates
regression coefficients toward zero
*Remember SEM can be thought of as
Path Analysis using Latent Variables

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 We now know about
latent variables, what
about path analysis?

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 Path Analysis
 Path analysis deals only with measured
variables.  A measured variable is a variable
that can be observed directly and is
measurable.
 Regression equations specified between
measured variables
 ‘Effects’ of predictor variables on
criterion/dependent variables can be:
– Direct – Indirect – Total
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 Key Takeaways: Path Analysis
 By conducting a path analysis,
researchers can better understand the
causal relationships between different
variables.
 To begin, researchers draw a diagram
that serves as a visual representation of
the relationship between variables.
 Next, researchers use a statistical
software program (such as SPSS or
STATA) to compare their predictions to
the actual relationship between the
variables. 16
 Model specification
 There two main ways of
communicating the system of
equations that represents a
theoretical model.

 Either with a set of

simultaneous equations, or
with a path diagram.

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 Path Model Assumptions
1. All causal relations are linear and
additive
4. There is a weak causal
2. All models are recursive
ordering
 results in uncorrelated error terms
5. Causal closure, meaning all
 no two-way causal relations
of the relevant causal variables
 no feedback loops
are included in the model
3. Error terms are uncorrelated with
other independent variables

If these assumptions are met, then we can use

least squares regression for our estimation. In
what follows we will be fitting our model to
the standardized data.
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An example by Joel S.
Steele, PhD :

For Business Plans, Marketing

Plans, Project Proposals,
Lessons, etc
 Drawing path diagrams of structural equation
models (SEM) for publication Path Diagram :
 Visualization of structural  A path diagram is kind
equation models is done with of like a flow-chart that
path diagrams. They are an uses arrows to show
important means to give your direct and indirect
audience an easier access to causal links between
the equation system, that your exogenous and
represents the theory you endogenous variables,
want to test. as well as your latent
and your observed
variables.
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 Drawing path diagrams of structural equation
models (SEM) for publication Path Diagram :

 As structural equation models can  Path diagrams consist of

become complex and contain a lot
of parameters to describe the
relationships between observed
and latent variables, it´s an
important step to visualize them
properly.
rectangles for observed
variables, ellipses for latent
variables, curves with arrow-
heads on both sides for
correlations and most
important: straight lines with
arrow-heads on one end as
paths, that link a predicting
and a predicted variable.

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 The hypothetical model in path analysis usually
involves two kinds of variables:
1. observable/manifest (endogenous or
dependent) variable:
 Observable variables serve as indicators of
the underlying construct represented by
the observable variables.
2. latent (exogenous or non-
observable) variables:
 latent variables are usually
theoretical constructs that cannot
be observed directly.

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 There are two goals of path
analysis:
1. understanding patterns
of correlations among the
regions
2. explaining as much of the
regional variation as
possible with the model

* Different from statistical testing in

other techniques, such as multiple
regression and ANOVA, the focus
in path analysis is usually on a
decision about the whole model:
reject, modify, or accept it?
 
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 A few noteworthy points regarding path
analysis:
* Requirement for large sample size? < 100: small;
100-200: medium.
* An alternative model might account for the proposed
model equally well if not better.
* Keep in mind there is a difference between a
statistical model of reality and reality itself
(Kline, 2005).
* Statistical causal modeling (including
SEM) does not prove causation.
* One assumption of path analysis,
measurement error for exogenous
variables, is hardly true in FMRI.
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Bollen, K. and Lennox, R. (1991). Conventional Wisdom on Measurement: A Structural Equation
Perspective. Psychological Bulletin, 110(2):305-314. doi:10.1037/0033-2909.110.2.305
Spearman, C. (1904). “General Intelligence”, objectively determined and measured. The American
Journal of Psychology, 15(2), 201-292. doi:10.2307/1412107
Everitt, B.S. and G. Dunn. 1991. Applied Multivariate Data Analysis. Halsted Press. New York,
NY. pp. 257-275. This chapter lays out two mathematical approaches to SEM
construction, and includes a very useful discussion on the limitations of path analysis at
its end.
Hoyle, R.H. (ed.) 1995. Structural Equation Modeling. SAGE Publications, Inc. Thousand Oaks,
CA. This book provides a very readable, broken-down introduction to SEM. It discusses
SEM in relation to AMOS software.
Johnson, R.A., and D.W. Wichern. 1982. Applied Multivariate Statistical Analysis. Prentice Hall,
Inc. Englewood Cliffs, NJ. pp. 326-333.
Kelloway, E.K. 1998. Using LISREL for Structural Equation Modeling. SAGE Publications, Inc.
Thousand Oaks, CA. Ch 6, Ch 7.
[1] Bullmore, E. T., Horwitz, B., Honey, G. D., Brammer, M. J., Williams, S. C. R., Sharma, T., How Good
is Good Enough in Path Analysis of fMRI Data? NeuroImage 11, 289-301 (2000).
[2] Stein, J.L., Wiedholz, L.M., Bassett, D.S., Weinberger, D.R., Zink, C.F., Mattay, V.S.,
Meyer-Lindenberg, A. (2007). “A Validated Network of Effective Amygdala Connectivity” NeuroImage
36: 736–745.

References
 Team Presentation

BARRIOS, DENJAY MARIKIT, ILONA ORIO, JULITO A. YPON, JULIUS

JANE D. JONATHAN M.

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