Structural Equation Modeling

The roots of structural equation modeling (SEM) begin with the invention of least squares about 200 years ago, the invention of factor analysis about 100 years ago, the invention of path analysis about 75 years ago, and the invention of simultaneous equation [Page 1005]models about 50 years ago. The primary focus with SEM is on testing causal processes inherent in our theories. Before SEM, measurement error was assessed separately and not explicitly included in tests of theory. This separation has been one of the primary obstacles to advancing theory. With SEM, measurement error is estimated and theoretical parameters are adjusted accordingly—that is, it is subtracted from parameter estimates. Thus, SEM is a fundamental advancement in theory construction because it integrates measurement with substantive theory. It ...