Patterns › Dimension reduction

Structural equation modeling (SEM)

Structural equation modeling relates latent factors, measured by observed indicators, to one another and to observed variables — covering CFA, path analysis and full SEM in one framework.

What is Structural equation modeling (SEM)?

SEM combines a measurement model (latent factors defined by observed indicators, 'F1 =~ x1 + x2 + x3') with a structural model (regressions among latents and observed variables, 'F2 ~ F1 + age'). Confirmatory factor analysis is the special case with no structural part; path analysis the special case with no latents.

Estimation is (by default) maximum likelihood on the covariance matrix: the model implies a covariance structure, and the χ² statistic tests whether the observed covariances are consistent with it. Because χ² is sample-size sensitive, practice leans on approximate fit indices — CFI/TLI (incremental fit vs a null model), RMSEA (misfit per degree of freedom, with CI), and SRMR (average residual correlation).

Each latent factor needs an identification constraint; the model fixes the first indicator's loading to 1 by default (those rows show no SE/z/p). MLR provides robustness to non-normality; FIML uses all available data under missing-at-random instead of listwise deletion.

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When should I use Structural equation modeling (SEM)?

  • Confirmatory factor analysis: testing a hypothesised item→construct structure (vs EFA's discovery framing).
  • Path models with mediation-style structures among several variables, with or without latent constructs.
  • Validating measurement instruments and testing structural theories in one step.

What data does it need?

Numeric columns (column headers become variable names) + a model in the model syntax + estimator (ML / MLR / GLS) + missing-data handling (listwise / FIML).

What does it report?

Parameter table (loadings, regressions, covariances, variances) with SE / z / p / 95% CI / standardized estimates; fit indices (χ², CFI, TLI, RMSEA + CI, SRMR, AIC, BIC); R² per endogenous variable; convergence + post-check warnings.

What does it assume?

  • Multivariate normality for ML (use MLR when doubtful).
  • Adequate sample size — common guidance is n ≥ 10–20 per free parameter.
  • Correct model specification; fit indices cannot rescue a theoretically wrong model.
  • Missing at random if using FIML.

How do I interpret the result?

Check convergence first, then fit: CFI/TLI ≥ 0.95, RMSEA ≤ 0.06, SRMR ≤ 0.08 (Hu & Bentler 1999) indicate good fit. Then read the standardized loadings (≥ 0.5 desirable) and structural paths like regression coefficients.

See also

References

  • Rosseel (2012). Structural Equation Modeling. JSS 48(2).
  • Hu & Bentler (1999). Cutoff criteria for fit indexes in covariance structure analysis. SEM 6(1).
  • Kline (2023). Principles and Practice of Structural Equation Modeling, 5th ed.