(SEM) Structural Equation Modeling
(SEM) Structural Equation Modeling
(SEM) Structural Equation Modeling
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G e t your p r o j e c t s d o n e .
For example, there are many factors that affect the organizational commitment
and the job satisfaction level of an employee. If the impact of organizational
commitment and job satisfaction level on perceived performance need to be
determined, then the usage of a simple linear model would be complex and
difficult. Thus, SEM analysis help in the easy linkage of the factors and
derivation of the results. The model formulated for stating the linkage is shown in
the below figure.
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5/7/23, 1:08 AM What is Structural Equation Modeling (SEM) analysis?
The terms to represent the different structures of linkage between the variables
and to define the nature of variables, relationships, errors, and models are:
The below figure explains each of these terms which are commonly used while
having SEM analysis.
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5/7/23, 1:08 AM What is Structural Equation Modeling (SEM) analysis?
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5/7/23, 1:08 AM What is Structural Equation Modeling (SEM) analysis?
Missing data should be avoided. In having less than 5% of the total data as
missing, deletion could be done but in case of having more than 5% of data
as missing, the maximum likelihood estimation method should be adopted.
Visual representation
After discussing the meaning of each of the technical terms, this section provides
a visual explanation of the terms.
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5/7/23, 1:08 AM What is Structural Equation Modeling (SEM) analysis?
In the above figure ME1, ME2, ME3, ME4, and ME5 represent the measurement
error; OV1, OV2, OV3, OV4, and OV5 are the observed variables; LV1 and LV2
show the latent variables, and RE1 depicts the residual error.
Furthermore, in the above figure, there are two measurement models and one
structural model i.e.
Figure 5:
Structural model
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5/7/23, 1:08 AM What is Structural Equation Modeling (SEM) analysis?
Include observed as well as latent variables for analysis i.e. SEM analysis
helps in including the measurable and non-measurable variables in the
model. For example, the impact of measurable factors like price, sales, or
discount could be determined on the non-measurable factor i.e. customer
attitude using SEM analysis.
Results derived from the analysis are more reliable due to the inclusion of
measurement error. As there is a large possibility of error while computing
the value of a factor in social science, thus usage of the confirmatory factor
analysis method in SEM analysis helps in including measurement error for
each computed variable to reduce biases.
SEM helps in testing the overall fitness of the model even in the presence of
multiple relationships. As often the information about the accuracy and
validity of the model is difficult to derive in the case of multiple linkages i.e.
in the presence of various factors or mediating variables. Thus, SEM
analysis by providing the values of absolute fitness, incremental fitness, and
parsimonious fitness indexes helps in the verification of the model accuracy.
Though the assumptions are flexible but still the technicality and complexity
of the assumptions prohibit the first-generation usage of SEM analysis.
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5/7/23, 1:08 AM What is Structural Equation Modeling (SEM) analysis?
Mx
SEPATH
CALIS
References
Malkanthie, A. (2015) ‘The Basic Concepts of Structural Equation Modeling’, Lap Lambert Academic Publishing, 1(Jan
uary), p. 55. doi: 10.13140/RG.2.1.1960.4647.
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