Structural equation

modeling (SEM) workshop

Dr Siddhi Pittayachawan
BEng, GCTTL, MEng, PhD, MACS CP
School of Business IT and Logistics
RMIT University, Australia
Presented at Dhurakij Pundit University on 20th Jan 2013

About me
Academic qualifications
1999: Bachelor of Engineering
(Electronics), Assumption University
2000: Master of Engineering
(Telecommunication), RMIT University
2008: Doctor of Philosophy (Business
Information Systems), RMIT University
2009: Graduate Certificate in Tertiary
Teaching and Learning, RMIT University
2

About me
Professional qualifications
1999: Associate Electrical Communication Engineer,
Council of Engineers, Thailand
20092010: Certificates of Completion, Australian
Consortium for Social and Political Research Incorporated
Practical measurement and multilevel analysis in the
psychosocial sciences
Applied structural equation modelling
Analysing categorical and continuous latent variables using
Mplus
Scale development, Rasch analysis and item response theory
Introduction to social network research and network analysis

2009: Certified Professional, Australian Computer Society

About me
Professional qualifications
20102012: Certificates of Completion, statistics.com
Practical Rasch measurementcore topics
Rasch applications in clinical assessment, survey research,
and educational measurement
Practical Rasch measurementfurther topics
Introduction to Bayesian statistics
Meta analysis
Spatial statistics with geographic information systems
Forecasting time series
Introduction to Bayesian computing
Bayesian regression modeling via MCMC techniques
Bayesian hierarchical and multi-level modeling
4

About me
Research projects
1998: A fluorescent dimmer with an PPM remote
controller
2000: A sample stock exchangeWAP application
2001: Fostering consumer trust and purchase
intention in B2C e-commerce
2007:
Use of partial least squares regression and structural
equation modeling in information system research
Evaluating the impact of information and
communications technology on the livelihood of rural
communities
5

About me
Research projects
2008:
Use of e-government services by the urban community
Green information technology
Cross-country study to foster consumer trust in B2C e-commerce

2009: E-business assimilation and its effects on the growth and export
performance of Australian horticulture firms
2010:
Piloting a hybrid work integrated learning model to enhance dual hub student
collaborations in an international work context
Adoption of green IT best practices and their impact on the sustainability of data
centres
Design and usability evaluation of mental healthcare information systems

2011:
Classifying Australian PhD theses by research fields, courses and disciplines
(RFCD) codes
Green IT organizational learning (GITOL)
6

About me
Supervised projects
Research projects
Completed
Fuzzy multicriteria analysis and its applications for decision making under uncertainty

Current
Managing quality issues along a complex supply chain management in fire truck
bodybuilder business: A Thai case study
E-commerce adoption in marketing: Tourism in Saudi Arabia
Supply network complexity and organizational performance: Investigating the relationship
between structural embeddedness and organizational social outcomes using social
network analysis
Impact of agile manufacturing on Thailand automotive performance and competitive
advantage
Information security behaviour for non-work activities

Industrial projects
2011:
AIS student chapter portal
Botanical art website
Couse moderation system

About me
Current research interests:
Trust in business and management information system
E-commerce
Green information system

Expertise:
Focus group
Grounded theory
Measurement
Methodology
Statistical modelling
Survey
8

Overview
Morning session (9AM12PM)
Lunch (12PM1PM)
Afternoon session (1PM4PM)

Detailed overview
9AM
Causality
SEM vs regression
Path analysis (w/ activity)

10AM
GOF indices & model modification (w/
activity)
Direct/indirect/total effects (w/ activity)
Moderation effect (w/ activity)
10

Detailed overview
11AM
Power analysis (w/ activity)
Multiple-group analysis (w/ activity)
Invariance analysis (w/ activity)
Q&A

12PM
Lunch

1PM
Theory of measurement
EFA
One-factor congeneric model (w/ activity)
11

Detailed overview
2PM
Two-factor congeneric model (w/ activity)
Multi-factor congeneric model (w/ activity)
Reliability analysis

3PM
Reliability analysis (activity)
Structural model (w/ activity)
Q&A

12

Democritus (460370B.C.)

I WOULD RATHER DISCOVER ONE

CAUSAL LAW THAN BE KING OF
PERSIA.
13

Causality
The relationship between one event
and another when the former is the
cause and the latter is the effect.

14

Characteristics of causal
relationships

Artificial isolation
First cause or infinite regress
Continuity of action
Ref: Bunge (2009)

15

Universe & Causality

OUT
Eye-hand model

IN
Hand-eye model

Ren Descartes drawing

16

Universe & Causality

When the whole universe is considered, there is
no causality. Anything correlates with everything
else.
Causality requires:
IN: the focus (i.e. scope) of the research
OUT: the background or the boundary conditions of the
research

Specification of IN and OUT creates asymmetry in

how we perceive.
In order to maintain the boundary of the research,
intervention (i.e. a controlled study) is required. If
there is no intervention, we have no clue whether
the change in our observation is due to things
17
inside or outside the model.

Controlling study?

Confounding
variable

Model

Cancelled out
by
randomisation
/random
sampling

Controlled
study
18

Testing causality
Experimental research is required in order to
test the existence of a relationship between
an independent variable and a dependent
variable while controlling external variables.
However, there are several reasons of why it
cannot be done:
Too expensive
Too time-consuming
Randomisation and manipulation is impossible or
unethical
Phenomenon is currently unobservable
19

Is there any other way?

Pearl (1998) argues that structural equation
modeling (SEM) allows us to test our ideas
with non-experimental data under the
assumption that a causal model is true.
The SEM results allow us to infer that, if we
have a physical mean to manipulation an
independent variable in a controlled
experiment, when an independent variable
is fixed by 1 unit, a dependent variable will
be changed by x unit.
20

What is path analysis?

The method of path coefficients
does not furnish general formulae for
deducing causal relations from
knowledge of correlations and has
never been claimed to do so. It does,
however, within certain limitations,
give a method of working out the
logical consequences of a hypothesis
as to the causal relations in a system
of correlated variables. Wright

21

What is SEM?
SEM is a framework purposed by Karl Gustav
Jreskog, James Ward Keesling, and David E.
Wiley in 1970s to integrate maximum
likelihood, a measurement model (i.e. factor
analysis), and a structural model (i.e. path
analysis). Bentler (1980) calls it the JKW
model. LISREL was the first software that
implemented this framework. Charles
Spearman is credited for factor analysis and
Sewall Wright for path analysis.
22

SEM software

EQS
LISREL
Mplus
Mx
nyx
R: lavaan, OpenMx, sem2
SAS: CALIS, TCALIS
SPSS: AMOS
Stata: GLLAMM, SEM
STATISTICA: SEPATH
23

Variables
There are 2 types of variables in SEM:
Manifest variable (observable) representing in a rectangular
Data
Composite variable

Latent variable (unobservable) representing in an eclipse

Concept
Construct
Residual (unexplained variance for a latent variable and a
dependent variable)
Error (unexplained variance for a manifest variable in a
measurement model)

When a structural model contains only manifest

variables, it is called path analysis. When manifest and
latent variables are involved, it is called SEM.
24

Types of causal relationships

Direct causal relationship
A

Indirect causal relationship

A

Ref: Jaccard, J., & Jacoby, J. (2010, p.

142)

25

Types of causal relationships

Spurious relationship
B
A
C

Bidirectional causal relationship

A

26

Types of causal relationships

Unanalysed relationship (correlation)
A

Moderation effect
A

C
27

What is the difference?

SEM VS REGRESSION

28

Regression
Purpose: To test the relationship
between multiple independent
variables and a dependent
Type: variable.
nominal,

Type: interval
Samples:
independent
Distribution: normal
No multicollinearity

IV1
IV2
IV3

ordinal, interval,
ratio

DV

Residual
Variance :
homoscedasticity
Distribution: normal

29

SEM
Purpose: To test the structure and
measurement of the relationships
between multiple independent and
Type: nominal,
Measurement
dependentordinal,
variables
interval,
model

ratio

e11

r22

X11
IV11

e22

X22

e33

X33

IV33

Y11

e55

Y22

e66

IV22
e44

X44

Type: interval

r11

Structural
model
30

Comparison
Aspect

Regression

SEM

Aim

Maximise of a
dependent variable

Replicate a sample
variancecovariance
matrix

Model

Simple

Complex

Dependent
Variable

Single

Multiple

Control Variable

First block/variable

All

Multicollinearity

Not allowed

Allowed

Data Fitting

Just-identified ()

Over-identified ()

Interpretation
Interpretation

Change
Change in
in
observation
observation
One
One at
at a
a time
time

Change
Change from
from
manipulation
manipulation
Simultaneously
Simultaneously

Adjusted

All
All results
results

Equation
Equation
Generalisability
Generalisability

31

What is over-identification?

is a scenario when you have more data points (i.e.

Itinformation)
than you need to estimate parameters ().

Different combinations of data points produce different

solutions. This leads to multiple results. A higher level of
over-identification means a higher number of solutions are
supported by the conceptual model when the model fits the
data. Consequently, this brings about a higher level of
generalisability, compared to regression that produces a
single result.
Imagine that you have 3 equations (i.e. information): , , and
. There are 2 unknown variables. Different sets of 2
equations generate different answers.

32

Benefits of overidentification

Statistical
power
Predictive
accuracy
Generalisabili
ty

Error
Sampledependent
Capitalisation
on chance
33

Why more generalisable?

A model with parameters that are fully optimised from a specific sample
cannot be replicate in another sample because the results capture all
specificity of that sample.
Statistics is a technique that aims in generalisation by discarding
specificity and retaining commonality across different samples.
Since results from regression is fully optimised on a specific sample, its
generalisation can only be inferred. This is because regression uses
100% of data. This is called just-identified, meaning that there is a
single solution in your model.
In contrast, path analysis allows us to use data less than 100% (i.e.
depending on your model specification); consequently, the results are
over-identified, meaning that there are multiple solutions in your model.
Basically, a model which can be applied in multiple solutions are better
than that which can be applied in a single solution. If it does not make
sense to you, substitute the word solution with either scenario or
situation.
34

Why less error?

When
you conduct multiple tests and assume

that these hypotheses are dependent, you

inflates a Type I error. The actual Type I error for
multiple tests is called familywise error. It can be
calculated as when n is the number of tests.
For example, given , conducting a series of 4
multiple regression analysis will have a Type I
error of 19% rather than 5%.
To maintain the same confidence level, we need
to decrease to per test based on Bonferroni
adjustment.
35

Familywise error
Test(s)
1
2
3
4
5
6
7
8
9
10

Error
5%
10%
14%
19%
23%
26%
30%
34%
37%
40%

Test(s)
11
12
13
14
15
16
17
18
19
20

Error
43%
46%
49%
51%
54%
56%
58%
60%
62%
64%
36

Why less error?

Although Bonferroni adjustment
allows us to use simple analysis to
test multiple dependent hypotheses,
we are at risk of failing to reject null
hypotheses because is too small,
especially when we have many
hypotheses. Remember that when
we decreases , will increase
unless we increase n.
37

Benefits of SEM

A Type I error is controlled

Direct/indirect/total effects
Causal inference
Complex models
Measurement reliability and validity
Likert scale is not assumed as interval data
Model fit
Model misspecification
Multiple-group analysis
Invariance analysis
Generalisability
Combined with other advanced techniques
38

What is tested in SEM?

Aspect

Experiment

Non-experiment

Environment

Controlled

Uncontrolled

Causal assumptions

Not required

Required

Statistical
assumptions

Required

Required

What to be tested

It tests the existence

of the relationship
between an
independent variable
and a dependent
variable.

It tests to what
extent an
independent variable
affects a dependent
variable under the
assumption that a
causal model is true.

39

Interpretation of
Regression

SEM

What would be the

difference in the
expected value of if
we were to observe at
level instead of level ?

is the deviation of
from its conditional
expectation.
The equality sign is
symmetrical.

What would be the

change in the expected
value of if we were to
intervene and change
the value of from to ?

is the deviation of
from its controlled
expectation.
The equality sign is
asymmetrical.

Ref: Pearl

40

What is ?
(epsilon) is an error variable. It
represents the influence of omitted
variables, which are background
variables outside the conceptual
model.
Note: go back to Descartes drawing
to review IN and OUT concepts.

41

Misunderstanding
Myth: Regression produces a
structural equation
Reality: Regression produces a
regression equation

Myth: SEM produces a regression

equation
Reality: Regression equation is
symmetrical, but structural equation is
asymmetrical (Pearl, 1998).
42

Misunderstanding
Myth: Partial least squares (PLS) regression is
a branch of SEM
Reality: Regression solve one equation at a time
while SEM solve all equations simultaneously; as
a result, regression cannot be categorised as part
of SEM.
Technically, regression produces the same
estimate as that of SEM when there is no
confounding effect (e.g. correlation between
independent variables and/or errors). This point
has been mathematically proven by Pearl (1995).
43

Misunderstanding
Myth: PLS has a higher statistical
power than that of SEM when a
sample size is small.
Reality: Goodhue, Lewis, and Thompson
(2006) conducted a Monte Carlo study
and found that there is no difference in
statistical power between PLS and SEM.

44

Start from the basic

PATH ANALYSIS

45

AMOS capabilities

Path analysis: A model that contains only manifest variables

Multiple-group analysis: A model that simultaneously tests several
groups of samples
Invariance analysis: Multiple-group analysis with a constrained across
groups of samples
Non-recursive model: A model that contains a feedback loop
Confirmatory factor analysis (CFA): A measurement model that
contains several manifest variables
Specification search: An analysis that explores and compares multiple
measurement models to select the best one based on different
combinations of sets of items
Latent growth modeling: A model that tests a trend over time
SEM: A model that contains both manifest and latent variables
Latent mean structure analysis: A model that estimates and contains
mean values of latent variables across groups of samples
Bayesian analysis: A model that generates new sets of samples for
model validation
46

AMOS
Note: AMOS and other SEM software
can permute missing values in your
data set. However, permuting data
restricts several features in an
analysis. As a result, you are
recommended to address missing
values in SPSS first.

47

AMOS
Step-by-step how to specify a
conceptual model on AMOS:
1. Open the data set
2. Draw and run your model
3. Evaluate your model

48

Step 1: Setting up
data

Open Amos Graphics

If you see any model on your
inferface, click File New:
(1) Click a Select data file(s)
icon
(2) Click File Name; locate and
open your data file
(3) Click OK

49

Step 2: Model
specification

(1) Click a List variable in data

set icon to see the list of
variables in your data file
(2) If you see this, you have
linked your data file
properly
(3) Drag and drop 2 variables
from the list to the empty
drawing space: EXPm and
TRU2
(4) Click a Draw paths icon
and draw it from EXPm to
TRU2

3
50

Step 2: Model
specification (cont)

(1) Click a unique variable icon

(2) Click on a variable TRU2 to
include a residual variable
(3) Click Plugins Name
Unobserved Variables and
you will see that the
residual variable has been
named

51

Step 2: Model
specification (cont)

(1) Click an Analysis properties

icon
(2) On Output tab, tick options
as shown in the figure;
close the Analysis
Properties window
(3) Click save. You are
recommended to create a
folder and save the AMOS
file since it will generate a
number of files.
(4) Click a Calculate estimates
icon to commence the
analysis

52

Step 3: Model
evaluation

(1) Click the Output button to

show the result visually
(2) Since Unstandardized
estimates are highlighted,
the results are
unstandardised. Click
Standardized estimates to
see different results
(3) This figure shows the
standardised results

53

Step 3: Model evaluation

(cont)
Click a View Text icon to see
numerical results

54

File: Path analysis 1

10-min Exercise:
Path analysis

Specify the model as shown on

the left hand side.
Also, in Analysis properties,
Output tab, tick Modification
indices.
Run the model and notice that
now there is Modification
Indices on the output window.

55

Estimators

56

AMOS Results
Sample Moments: the sample variancecovariance

matrix
Estimates: the estimated results based on the
conceptual model. The results include:
Unstandardised estimates
Standardised estimates
Variances
Squared multiple correlations ( or coefficient of determination)
Estimated variancecovariance matrix (implied covariances)
Estimated correlation matrix (implied correlations)
Residual variancecovariance matrix (residual covariances)
Standardised residual variancecovariance matrix
(standardized residual covariances).
57

AMOS Results
Assessment of Normality: univariate and
multivariate normality tests
Observations farthest from the centroid:
Mahalanobis distance (d2)
p1: the probability of di2 to exceed the centroid
Large p1 value means that a case i is probably an outlier under
the assumption of multivariate normality.

p2: the probability of the largest di2 to exceed the centroid

Large p2 value means that there are probably outliers under the
assumption of multivariate normality.

Basically p1 looks at a specific case while p2 looks at all

cases.

58

What are we testing?

In path analysis, software will estimate a
sample variancecovariance matrix based on
our conceptual model. This matrix is tested
against the real sample matrix to test the null
hypothesis that:
H0: The estimated matrix and the sample matrix
are the same.

This is done by using 2 test which is a nonparametric test equivalent to t-test.

The 2 test can be found at CMIN under Model
Fit.
59

Testing a model in SEM

Data

Sample
Matrix

Model

Estimate
d Matrix

60

CMIN
CMIN is a minimum discrepancy function.
AMOS supports the following functions:
Maximum likelihood (ML)
Generalized least squares (GLS)
Unweighted least squares (ULS)
Scale-free least squares (SLS)
Asymptotically distribution-free (ADF)

ML is generally robust against data which

moderately deviates from multivariate
normality, thereby being used by default.
61

Model types in results

There are 3 types of models that you
will find in AMOS results:
Default: the conceptual model
This model is your hypothesis.

Saturated: the conceptual model with

df=0
This model is equivalent to regression.

Independence: the conceptual model

with maximum df
This model assumes no relationship among
variables.
62

Model fit: CMIN

NPAR:
number of parameters in the model

More detail can be found under Parameter summary

CMIN and P: 2 test is a discrepancy function

between an estimated matrix and a sample
matrix.
DF: degrees of freedom
df = total data points - free parameters
When df<0, model is under-justified, meaning that it
cannot be solved because there are not enough
data points.

CMIN/DF: normed 2 test

63

t-rule
To
enable an identifiable model, you must
ensure that you do not have the number of
free parameters higher than data points. This
is a necessary but not sufficient condition for
model identification. It can be calculated with
the formula below (Bollen, 1989):
t = the number of free parameters (i.e.
parameters that we estimate in a model)
k = the number of observed variables

64

Model fit: RMR, GFI

root mean square residual is the
RMR:

average difference between the

population matrix and the sample matrix.
However, in practice, standardized root
mean square residual (SRMR) is used.

GFI: goodness-of-fit index is the

percentage of variances that the model
can reproduce.
65

Model fit: RMR, GFI

AGFI: adjusted goodness-of-fit index
is the adjusted value of GFI to
account for model complexity.
PGFI: parsimonious goodness-of-fit
index is the adjusted value of GFI to
account for model parsimony

66

Model fit: Baseline

comparisons
NFI:
normed fit index is a rescaled 2 with a range
of 0 and 1. It is used to compared a conceptual
model with an independence model.
RFI: relative fit index, AKA BL86, is the adjusted
value of NFI to account for model complexity.

67

Model fit: Baseline

comparisons
IFI:
incremental fit index, AKA BL89, is

derived from NFI to account for complexity

of an evaluated model.

TLI: TuckerLewis index, AKA NNFI

(nonnormed fit index), is an adjusted value
of IFI to account for model complexity.

68

Model fit: Baseline

comparisons
CFI:

comparative fit index is a

rescaled 2 that accounts for a
noncentrality parameter.

69

Model fit: Parsimony-adjusted

measures
PRATIO: parsimony ratio is the ratio
of the degrees of freedom of the
evaluated model and of the baseline
model.
PNFI: parsimonious normed fit index
is the adjusted value of NFI to
account for model parsimony.
70

Model fit: Parsimony-adjusted

measures
PCFI:

parsimonious comparative fit

index is the adjusted value of CFI to
account for model parsimony.

71

Model fit: NCP

NCP: noncentrality parameter is an
estimated used for calculating CFI.
LO 90: Lower limit of 90% confidence
interval of NCP.
HI 90: Upper limit of 90% confidence
interval of NCP.

72

Model fit: FMIN

FMIN: a minimum value of the discrepancy
function F, which derives from 2 to account
for the non-centrality parameter
F0: a discrepancy function between an
estimated matrix and the population
matrix.
LO 90: Lower limit of 90% confidence
interval of F0.
HI 90: Upper limit of 90% confidence
interval of F0.
73

Model fit: RMSEA

RMSEA:
root mean square error of approximation is

a discrepancy function between an estimated matrix

and the population matrix while accounting for
model complexity.
LO 90: Lower limit of 90% confidence interval of
RMSEA.
HI 90: Upper limit of 90% confidence interval of
RMSEA.
PCLOSE: a significance test of RMSEA to test the null
hypothesis:
H0: The estimated matrix and the population matrix are the same.
74

Model fit: AIC

AIC: Akaike information criterion is a discrepancy
function between an estimated sample matrix
and an estimated population matrix. It is used for
model selection process to penalise a complex
model without a substantive improvement.
BCC: BrowneCudeck criterion provides a penalty
greater than AIC.
CAIC: Consistent Akaike information criterion
provides a penalty greater than BCC.
BIC: Bayes information criterion provides a
penalty greater than CAIC.
75

Model fit: ECVI

ECVI: Expected cross-validation index
is equivalent to AIC.
MECVI: Modified expected crossvalidation index is equivalent to BCC.

76

Model fit: HOELTER

HOELTER: a crude measurement of statistical power
of 2. It is used to accept or reject a model when the
number of hypothetical observations is larger or
smaller than the number of actual observations.
HOELTER 200G (i.e. G is the number of groups)
signifies sufficient statistical power.
When a model is accepted and HOELTER < 200, it means
that the model would be rejected when the number of
observations exceed HOELTERs n.
When a model is rejected while the number of
observations exceed HOELTERs n, it means that the
model would be accepted when the number of
observation is equal or less than HOELTERs n.
77

Index

SRMR

Value

Meaning

Reference

p 0.01

The sample matrix and the

estimated matrix are the
same.

Yu (2002)

< 0.07

The average error in the

model is minimal.

RMSEA < 0.06 with

PCLOSE >
0.05

The population matrix and

the estimated matrix are the
same, and the average error
in the model is minimal.

IFI

The over-identification
condition of the model is at
an acceptable level.

0.95

TLI
CFI

0.96

PCFI

0.85

The estimated parameter is

Mulaik
robust against other samples. (1998)

BIC

Smallest

The model is more

generalisable.

Pitt and
Myung
(2002)

78

What if my model doesnt fit the

data?
Then something must be wrong:
Data
Go back to your raw data and see what might
have gone wrong (e.g. typo)

Assumptions
Explore your data further whether any
assumption is extremely violated

Model
Misspecified model
Your model is wrong
Theory is wrong
79

Modification index
Modification index (MI), or Lagrange multiplier (LM), is a
measure that indicates how to fit the model better by
estimating a new parameter. It provides two pieces of
information:
2: This test tells you how much 2 would reduce when a
parameter is modified.
Par Change: This measure tells you how much a parameter
value will change when a parameter is modified.
A positive value means the current model underestimates a parameter.
A negative value means the current model overestimates a parameter.

MI provides three tables: covariances, variances, and

regression weights. When one or more parameters do not
fit the data, they will be listed here.

80

10-min Exercise: Fitting a

model

File: Path analysis 2

Use MI to make the model fits the

data better.
Hints:
Modify one parameter at a time
After modifying a parameter, run the
analysis
Make a note on what you have modified

81

Modified model
MI must be used with caution. Mindless model
modification leads to the following issues:
Theoretical nonsense
Overfitting
More error
Less statistical power
More capitalising on chance
Less predictive accuracy
More sample-dependent
Reduced generalisability

82

Indirect & total effects

In a complex model which contains
relationships among dependent
variables, you may wish to calculate
indirect effects and total effects,
especially if they are also your
research interest.

83

File: Path analysis 2

10-min Exercise:
Path analysis #2

Specify the model as shown on

the left hand side.
In Analysis properties, Output
tab, tick Indirect, direct & total
effects.
Run the model.

84

AMOS results: Scalar

estimates (regression weights)

Unstandardised
Estimate
S.E.
z-test
p-value (2-tailed)

Standardised estimates
Estimate

Variances

Estimate
S.E.
z-test
p-value (2-tailed)

Squared multiple correlations ( or coefficient of determination):

The percentage that a dependent variable is explained by other
variables
85

AMOS results: Matrix

Estimated
variancecovariance matrix

(implied covariances)
Estimated correlation matrix (implied
correlations)
Residual variancecovariance matrix
(residual covariances):
Standardised residual variance
covariance matrix (standardized
residual covariances):

86

AMOS results: Matrix

Total effects

Standardised total effects

Direct effects
Standardised direct effects
Indirect effects
Standardised indirect effects
87

Direct effect
The direct effect of X on Y is the
increase that we expect to see in Y
by unit given a unit increase in X.

88

Indirect effect
The indirect effect of X on Y is the
increase that we expect to see in Y
by unit while leaving X untouched
and increasing Z to whatever value
that Z would attain under a unit
increase of
X.

89

Total effect
The total effect of X on Y is the
increase that we expect to see in Y
by yx+zx unit under a unit increase
of X.
Z
zx

yx

90

Interpretation of unstandardised
estimates
Based on the results, if we were to
change the value of EXPm from
expm to expm+1, the value of TRU2
is expected to change from tru2 to
tru2+0.166.
Basically, it means that the
difference of the mean values of trust
between inexperienced online
shoppers and experienced online
shoppers is 0.166.

91

Interpretation of standardised
estimates
on the results, if we were to change
Based

the value of EXPm from expm to

expm+1expm, the value of TRU2 is
expected to change from tru2 to
tru2+0.100tru2.
Since EXPm is dichotomous, the
interpretation in terms of standard
deviation does not make any sense! We
can only interpret that the effect size of
EXPm on TRU2 is small.

92

Use of estimates
Unstandardised

Standardised

To create a
mathematical
equation
To use as a priori
parameters
To simulate a model
Stable across samples

To calculate an effect
size
To communicate with
others
To compare with other
studies
Unstable across samples
since a parameter is
standardised using a
sample-specific standard
deviation
93

SEM procedure
Model
evaluation

Fit?

No

Model
rectification

Yes
Path
evaluation
94

Moderation effect
An
effect from one variable (e.g. z)

impacting a strength of a relationship

between two other variables (e.g. x &
y).
x
y
z

Mathematically, it can be written as:

95

10-min exercise: Path

analysis #3

File: Moderation effect

Specify model as show below:

96

Residual centering
Lance (1988) proposed use of
residual centering to address
multicollinearity problems from
creating a moderating variable. This
is done by using variables, which are
used to create the moderator, to
predict the moderator.

97

Warning
Having only 2 variables does not produce
any evidence about causality. You need at
least 3 variables in a model. In fact, the
third variable may affect a relationship
between 2 variables.
Cum hoc ergo propter hoc (with this,
therefore because of this) is a logical
fallacy stating that correlation is causation.
Correlation is a necessary but not sufficient
condition to be causation.
98

POWER ANALYSIS

99

Importance of statistical
power
Significance
test provides a p-value which tells us the

probability of observing H0, given that H0 is true.

Effect size tells us to what extent a result is practical,
given that Ha is true.
Statistical power tells us the probability of
reproducing Ha, given that Ha is true. For example,
given 80% of statistical power in your result, there is
chance of reproducing Ha in 2 consecutive attempts.
In summary, the higher the statistical power, the
higher reproducibility the result is.
Ref: Schmidt & Hunter (1997)
100

Hypothesis & SEM

Conclusion
Sufficient power
()

Outco
Outco
me
me

H0 is not
rejected
()

There is not sufficient

There is not sufficient
evidence to reject
evidence to reject
that the model is
that the model is
correct.
correct.

H0 is
rejected
()

There is sufficient
There is sufficient
evidence to reject
evidence to reject
that the model is
that the model is
correct.
correct.

Insufficient power
()
Although there is not
Although evidence
there is not
sufficient
to
sufficient
evidence
to
reject that the model
reject
that the
model
is correct,
it may
is correct, it may
happen by chance.
happen by chance.
Although there is
Although there is
sufficient evidence to
sufficient
to
reject thatevidence
the model
reject
that the
model
is correct,
it may
is correct,
it may
happen
by chance.
happen by chance.

101

MacCallum, Browne, Suguwaras

power analysis
They proposed the idea of testing hypotheses of
exact fit, close fit, and not close fit.
Exact fit
H0: RMSEA=.00, Ha: RMSEA=.06

Close fit
H0: RMSEA=.06, Ha: RMSEA=.09

Not close fit

H0: RMSEA=.06, Ha: RMSEA=.03

These values are heuristic. MacCallum, Browne, &

Suguwara (1996) proposed to use RMSEA=.05,
but later Yu (2002) found that it is better to use
RMSEA=.06.
102

RMSEA CI

Close fit

Not close fit

.00
Exact fit

.03

.06

.09

103

Outcomes of hypothesis testing

Reality

(H0)

(Ha)

Correct Outcome
[1-]

False Negative
(Type II Error)
[]

False Positive
(Type I Error)
[]

Correct Outcome
[1-]

Outcome

104

SPSS syntax for power

analysis
Provided by Timo Gnambs
Step-by-step guide:
1. Look up at your RMSEA and its 90% confidence interval results
(i.e. LO90 and HI90).
2. Decide which hypothesis you want to test, preferably the value
outside 90% CI.
3. Change the value of df, , n, RMSEA0, and RMSEAa accordingly.
4. You may set RMSEA0 to be the same value you get from your
result.
5. Run the script Power analysis (beta).sps. Note that it does not run
if your data is blank.
6. If you want to further know what is the number of observations
that you need to have at least 80% of statistical power, run the
script Power analysis(n).sps. You may change the value of df, ,
power (1-), RMSEA0, and RMSEAa accordingly.
105

5-min exercise: Power

analysis
Conduct power analysis to calculate
statistical power

106

Multiple-group analysis
SEM allows you to test a model
against multiple groups of samples
simultaneously. This technique is
useful when you
know/suspect/hypothesise that
samples are heterogeneous. This
allows us to control a Type I error.

107

File: Multiple-group analysis

10-min exercise: Multiple-group

analysis

1. From the path model #3, save it as a new file

2. From the menu Analyze, click Manage Group
3. Rename the current group to Experienced
4. Click New and rename the new group to Inexperienced
5. Click the icon Select data file(s)
6. Click the button Grouping Variable
7. Select the variable EXPm and click OK
8. Click the button Group Value
9. Select the group having the value 1, click OK
10.For the group Inexperienced, locate the same data file
and assign the group having the value 0
108

Invariance analysis
SEM allows you to test a parameter
to be equal across groups of
samples. This technique is useful
when, for example, you hypothesise
that the effect of one variable on
another variable is constant across
groups of samples.

109

File: Invariance analysis

10-min exercise: Invariance analysis

1. Identify which parameter is very similar
across both groups
2. Open Object Properties window for that
parameter
3. Name that parameter
4. Notice that All groups
are ticked, which means
that this parameter is
equal across groups of
samples
110

What types of parameters can be

constrained to be invariant?
Mean
AMOS automatically centred means of all
parameters in a model to 0. If you want to test
mean values, first you need to set AMOS to
estimate means and intercepts. After that, you
must name all mean parameters that you want
AMOS to estimate through Object Properties
window.

Slope (structural
parameters)
Residual
111

Theory of measurement

I call em as I see em, said the

first. The second replied, I call em
as they are. The third said, what I
call em makes em what they are.
112

Measurement paradigm
A 20th century philosophy of measurement called
representationalism saw numbers, not as properties inherent in
an object, but as the result of relationships between
measurement operations and the object (Chrisman, 1995, p.
272).
Measurement of magnitudes is, in its most general sense, any
method by which a unique and reciprocal correspondence is
established between all or some of the magnitudes of a kind and
all or some of the numbers, integral, rational, or real, as the case
may be In this general sense, measurement demands some
oneone relation between the numbers and magnitudes in
questiona relation which may be direct or indirect, important or
trivial, according to circumstances (Russell, 1903, p. 176).
Different analyses require/support different levels of
measurement.
113

Measurement paradigm

Fundamental measurement theory

Constructivism
Representational structur
Scal
To represen

Classical test theory

Operationalism
Error structure
Score
To describe

Latent variable theory

Realism
Explanatory structure
Data generation
To 114
explain

Measurement paradigm
The
classical test theory model is the theory of
psychological testing that is most often used in
empirical applications. The central concept in
classical test theory is the true score. The true
scores are related to the observations through the
use of the expectation operator: the true score is
the expected value of the observed score.
(Borsboom, 2005, p. 3)
The true score of any person on an item () is the
expected value of the observed score (). The
difference between the observed score and the
true score is the error score ().
115

Measurement paradigm
The latent variable model has been proposed as an

alternative to classical test theory, and is especially

popular in psychometric circles. The central idea of
latent variable theory is to conceptualize theoretical
attributes as latent variables. Latent variables are
viewed as the observed determinants of a set of
observed scores; specifically, latent variables are
considered to be the common cause of the observed
variables. (Borsboom, 2005, p. 4)
Depending on a priori hypothetical model, a true score
may be caused by a persons ability (), an item difficulty
or a precision (an intercept ), an item discrimination or a
scale (a slope ), and a guessing effect ().
116

Measurement paradigm
The representational measurement modelalso known

as abstract, axiomatic, or fundamental

measurement theoryoffers a third line of thinking
about psychological measurement. The central concept
in representationalism is the scale. A scale is a
mathematical representation of empirically observable
relations between the people measured. (Borsboom,
2005, p. 4)
is an empirical relational system which represents an
observation of the product from an item and a person
which can be used to order items and persons
independently. When measurement is additive, can be
mapped into a numerical relational system: .
117

In research ...

118

Measurement assembly
Constru
ct

Ontological plane

-Theories
-Models
-Scales
-Law statements

Theoretical plane

Empirical plane

x1

x2

x3

x4

Instrumental plane
X1:
X2:
X3:
X4:

This course is useful.

I learned a lot of things in this course.
Content in this course is applicable in real-world situations.
All lecturers in this course are hot!

119

Fundamental measurement theory

TO REPRESENT

120

Content validity
1. Construct specification
Domain
What is included
What is excluded

Facets (substrata)
Some researchers refer to facets as dimensions.

Dimensions (e.g. rate, duration, magnitude)

Modes (e.g. thought, behaviour)
Temporal parameters (response interval, duration of timesampling)
Situations

2. Function of instrument (e.g. brief screening,

functional analysis, diagnosis)
121

Content validity
3. Assessment method
4. Item generation

Deduction
Experience
Theory
Literature
Instrument
Content expert
Population
122

Content validity
5. Item alignment
Use table of construct to map against items
Generate multiple items/facet
Adjust the number of items relatively to the
importance of facet

6. Item examination
Suitability of items for a facet
Consistency, accuracy, specificity, and
clarity of wording and definitions
Remove redundant items
123

Content validity
7. Quantitative parameter
Response formats and scales
Time-stamping parameters

8. Instrumentation
Create instructions to match with
domain and function of assessment
instrument
Clarify and strive for specificity and
appropriate grammatical structure
124

Content validity
9. Stimuli creation (e.g. social
scenarios, audio and video
presentations)
10.Pre-test (with expert for steps 13
and 59)
11.Pilot test (with sample)
12.Item screening (using content
validation process by Lindell (2001),
Lindell, Brandt, & Whitney (1999),
and Lindell & Brandt(1999))

125

Ref: Chrisman (1998, p. 236)

Levels of measurement
Level

Information required

Example

Nominal

Definitions of categories

Sex

Graded
membership

Definitions of categories plus degrees of

membership or distance from prototype

Socio-economic status

Ordinal

Definitions of categories plus ordering

Rating scale

Interval

Unit of measure plus zero point

Degree Celsius

Log-interval

Exponent to define intervals

Richter magnitude
scale

Extensive ratio

Unit of measure (additive rule applies)

Length, mass, time

Cyclic ratio

Unit of measure plus length of cycle

Angle

Derived ratio

Unit of measures (formula of

combination)

Density, velocity

Counts

Definition of objects counted

Number of employees

Absolute

Type

Probability,
proportion
126

Latent variable theory

TO EXPLAIN

127

Measurement analysis

128

Latent variable models

Manifest variables are
Continuous

Categorical

Continuous

Latent variables are

Categorical

129

Types of indicators
Reflective
indicators

Formative
indicators

Reactive
indicators

X11

X22

X33

X44

e11

e22

e33

e44

X11

X22

X33

X44

X11

X22

X33

X44

e11

e22

e33

e44

Ref: Hayduk et al. (2007)

130

Type of measurement
models

Essentially
-equivalent

Parallel

1 2 3 4
x1 x2 x3 x4
1 2 3 4

1 2 3 4
x1 x2 x3 x4
1 2 3 4

1
x1

2
x2

x3

x4

Congeneric

-equivalent
1 2 3 4
x1 x2 x3 x4
1 2 3 4

Ref: Graham (2006)

1 2 3 4
x1 x2 x3 x4
1 2 3 4
131

Type of measurement
models
Variable-length
=1

1
1
11

22

33

44

x1

x2

x3

x4

Ref: Jreskog (1978)

132

Measurement parameters
Mean is precision and difficulty.
Factor loading, or slope, is scale and
discrimination.
Error variance is error and unique
variance. Theoretically, it should be
random error. However, if there is
systematic error, 2+ errors will be
correlated.
133

Exploratory factor analysis

(EFA)
Purpose: To
create a
psychometric
measurement by
discovering an
underlying
pattern and
Item
conceptualising
a
Type: interval
Samples:
latent variable

F1

F2

X1

X2

X3

X4

e1

e2

e3

e4

independent

134

EFA use
To partial the measurement error out of
the observe scores
To explore underlying patterns in the data
To determine the number of latent
variables
To reduce the number of variables
To assess the reliability of each item
To eliminate multi-dimensional items (i.e.
cross-loaded variables)
135

Dimensionality
Multi-dimensional
construct

Unidimensional
factor

Multidimensional
factor

Multidimensional
item

Unidimensional
construct

Uni-dimensional
item
136

EFA processes

137

Extraction
When you assume data to be the
population:
Principal axis factoring assumes that
factors are hypothetical and that they
can be estimated from variables.
Image factoring assumes that factors
are real and that they can be estimated
from variables.

138

Extraction
When you assume data to be a sample randomly selected
from the population:
ULS attempts to minimise the sum of squared differences
between estimated and observed correlation matrices, excluding
the diagonal.
GLS attempts to minimise the sum of squared differences
between estimated and observed correlation matrices while
accounting uniqueness of variables (i.e. the more the
uniqueness of variables is, the less weight the variables have).
ML attempts to estimate parameters which are likely to produce
the observed correlation matrix. The estimated correlation
matrix is accounted for the uniqueness of variables.
Kaisers alpha factoring assumes that variables are randomly
sampled from a universe of variables. It attempts to maximise
reliability of factors.
139

Rotation
Orthogonal rotation assumes factors to be
uncorrelated from one another:
Quartimax maximises the sum of variances of
loadings in rows of the factor matrix. It attempts to
minimise the number of factors needed to explain each
variable. This method tends to make a number of
variables highly loaded on a single factor.
Varimax maximises the sum of variances of loadings
in columns of the factor matrix. It attempts to minimise
the number of variables highly loaded on each factor.
Equamax combines Quartimax and Varimax
approaches, but it is reported to behave erratically.

140

Rotation
Oblique rotation assumes factors to be
correlated with one another:
Direct oblimin allows you to adjust a degree
of correlation between factors. Delta value of
0 allows factors to be moderately correlated.
On the other hand, delta value of +0.8 allows
factors to be more correlated while delta
value of -0.8 allows factors to be less
correlated.
Promax is quicker than direct oblimin. It is
useful with a large sample.
141

Extraction & rotation

F1

F1

F2
F2
142

5-min exercise: Principal axis

factoring
1. Click Analyze Dimension Reduction Factor
2. Select Q2Q65 into Variables
3. Click Descriptives; tick Coefficients, Significance
levels, Determinant, KMO and Bartletts test of
sphericity, Reproduce, and Anti-image; click
Continue
4. Click Extraction, choose Principal axis factoring
for Method, tick Scree plot, click Continue
5. Click Rotation, choose Direct Oblimin, click
Continue
6. Click Options, tick Sort by size and Suppress
small coefficients, type .33, click Continue
143
7. Click OK

Reading EFA Results

Correlation matrix is a good start to look for bad items:
those that do not correlate with others (r<0.3) and those
that correlate highly with other (r>0.9). These items are
subject for elimination. In addition, a determinant value
higher than 10-5 signifies that there is no multicollinearity
issue.
KaiserMeyerOlkin (KMO) measure of sampling
adequacy tells you whether data is factorable:
>0.9
>0.8
>0.7
>0.6
>0.5
<0.5

is
is
is
is
is
is

marvellous
meritorious
middling
mediocre
miserable
unacceptable
144

Reading EFA Results

Bartletts test of sphericity determines whether the
observed correlation matrix is different from the identity
matrix, meaning that you cannot analyse data with EFA if
the data is the identity matrix since there is no correlation
between variables. The null hypothesis is:
H0: The observed correlation matrix and the identity matrix have
the same value.

Anti-image correlation matrix contains the KMO

measure of each variable (i.e. a diagonal element) and
negatives of partial correlation among variables (i.e. offdiagonal elements). The KMO measure less than 0.5 means
that a particular variable is subject for elimination. In
addition, a value of negative partial correlation should be
small.
145

Reading EFA Results

Total Variance Explained table shows the
proportion of variance explained by factors:
Based on Kaisers criterion, factors having eigenvalues
greater than 1 should be retained. The logic behind this
argument is that a factor should explain at least one
variable. Generally, this criterion leads to an overfactoring
issue. However, this justification is accurate when:
The number of variables is less than 30 and extracted
communalities are all greater than 0.7.
The sample size is more than 200 and extracted communalities
are 0.6 or higher.

Communalities table shows the percentage of

variance of each variable explained by factors. It is
item reliability (R2).
146

Reading EFA Results

Reproduced Correlations table displays the
predicted correlation matrix. Ideally, it should be
the same as the observed correlation matrix. It also
shows residual which is the difference between the
predicted correlation matrix and the observed
correlation matrix. The percentage of nonredundant residuals with an absolute value higher
than 0.5 should be less than 50%.
Scree Plot depicts eigenvalues gained from an
additional factor. The cut-off point should be at
where the slope changes dramatically. Use of this
graph is controversial as being subjective.
147

Reading Results
Factor Matrix shows the correlation between
items and factors (i.e. a factor loading) before
rotation is taken place.
Pattern Matrix shows the correlation between
items and factors after rotation is taken place.
Structure Matrix shows the correlation between
items and factors, accounted for relationships
between factors. Actually, it is the product of the
pattern matrix and the factor correlation matrix.
Factor Correlation Matrix shows the correlation
between factors.
148

How many factors?

You should use a combination of:
Your measurement
Your conceptual model
Theories
Literature
Eigenvalues (Kaisers criterion)
Pattern matrix
Communalities (item reliability)
Scree plot
Parallel analysis
149

File: rawpar

Parallel analysis
To determine the maximum number of
factors to be extracted by assessing
eigenvalues of the data against those of
the simulation. Factors to be extracted
must have eigenvalues higher than those
of the simulated ones.
You may use the SPSS script provided by
OConnor (2000) or the online engine
provided by Patil
, Singh, Mishra, and Donovan (2008) .
150

Confirmatory factor analysis

(CFA)
Purpose: To test
a psychometric
measurement by
hypothesising an
underlying
pattern based on
a known
construct.Item
Type: interval
Samples:
independent

F1

F2

X1

X2

X3

X4

e1

e2

e3

e4

151

CFA
To
test a specific measurement model (i.e.
parallel, -equivalent, essentially -equivalent,
congeneric, and variable-length models)
To test a higher-order factor model
To test construct validity (i.e. convergent validity,
discriminant validity, and factorial validity)
To assess to what extent the measurement fits the
data
To perform multiple-group or invariance analysis
To prepare the measurement model for structural
equation modeling (SEM)
152

Measurement validation
Convergent validity

To test dimensionality of a factor and items

To assess construct reliability
Method: one-factor model

Discriminant validity
To test that 2 factors represent different things
Method: nested two-factor model (i.e. one model assumes
two factors to be the same thing and the other does not),
average variance extracted ( AKA average variance extract
(AVE))

Factorial validity
To test that all factors in the measurement fits the data
Method: multi-factor model
153

File: Convergent validity

Convergent validity

154

File: Discriminant validity

Discriminant validity

155

CorrelationAVE comparison
1.
Calculate AVE using the formula
Ref: Fornell & Larcker (1981)

2. Produce a correlation matrix for every pair of

factors.
3. Calculate a squared correlation matrix ()
4. Evaluate discriminant validity with the following
criteria:

. Example: Molla, Cooper, & Pittayachawan (2011)

156

File: Factorial validity

Factorial validity

157

Construct validity
Convergent
validity
Fit?
Discriminant
validity
Fit?
Diff?
Factorial validity
Fit?

ef: Molla, Cooper, & Pittayachawan (2011)

Fix/free
parameter
Split factor
Drop item
Fix/free
parameter
Drop item
Combine
factors
Fix/free
parameter
Drop item
158

Correlated errors
Freeing a correlational parameter
between error terms may be a post
hoc practice to improve model fit.
However, it should be supported by a
theoretical explanation.
Gerbing (1984) explains that one
possibility to have a correlated errors
is due to multi-dimensionality.
159

Classical test theory

TO DESCRIBE

160

Ref: Alreck & Settle (2004, p. 58)

161

Reliability
The extent that your measurement
can produce consistent results (i.e.
precision)

162

Groves (2004, p.
10)

163

Error
Consists of 2 components:
Bias is a constant error caused by research design.
Variance is a variable error caused by obtaining
data from different respondents, using different
interviewers, and asking different questions.

Both bias and variance consist of 2

components:
Observation error is deviation of observed
scores from true scores.
Non-observation error is caused by failure to
include other samples.
164

Error in observation
Observation error consists of 4
components:
Interviewer error is caused by ways of
administration made by interviewers.
Respondent error is caused by different
individuals give responses with a different
amount of error.
Instrument error is caused by design of
instruments.
Mode error is caused by using different modes
of enquiry.
165

Error in non-observation
Non-observation error consists of 3
components:
Coverage error is caused by failure to
include samples into a sampling frame.
Non-response error is caused by
respondents cannot be located or refuse to
respond.
Sampling error is caused by statistics
producing results based on a subset of the
population which may exhibits responses
differently from other subsets.
166

Error in non-response
Non-response may cause by:
Respondents lack motivation or time
Fear of being registered
Travelling
Unlisted, wrong, or changed contact details
Answering machine
Telephone number display
Illness or impairment
Language problems
Business staff, owner, or structure changes
Too difficult or boring
Business policy
Low priority
Survey is too costly, or lack of time or staff
Sensitive or bad questions

Ref: Biemer & Lyberg (2003, p. 93)

167

Error in statistics
There are 2 components:
Systematic error represents something that is
not captured in a model.
Random error, AKA measurement error,
represents something that uniquely causes
observed scores to deviate from true scores.
This type of error is supported by latent variable
models. It is a combination of error generated
by interviewers, respondents, and instruments.
When multitraitmultimethod (MTMM) is used,
mode error can also be incorporated.
168

Instrument error
Unstated criteria
Wrong: How important is it for stores to carry a
large variety of different brands of this product?
Right: How important is it to you that the store you
shop at carries a large variety of different brands?

Inapplicable questions
Wrong: How long does it take you to find a parking
place after you arrive at the plant?
Right: If you drive to work, how long does it take
you to find a parking place after you arrive at the
plant?
169

Instrument error
Example containment
Wrong: What small appliances, such as countertop
appliances, have you purchased in the past month?
Right: Aside from major appliances, what other
smaller appliances have you bought in the past
month?

Over-demanding recall
Wrong: How many times did you go out on a date
with your spouse before you were married?
Right: How many months were you dating your
spouse before you were married?
170

Instrument error
Over-generalisations
Wrong: When you buy fast food, what percentage of the
time do you order each of the following type of food?
Right: Of the last 10 times you bought fast food, how
many times did you eat each type of food?

Over-specificity
Wrong: When you visited the museum, how many times
did you read the plaques that explain what the exhibit
contained?
Right: When you visited the museum, how often did you
read the plaques that explain what the exhibit contained?
Would you say always, often, sometimes, rarely, or never?

171

Instrument error
Over-emphasis
Wrong: Would you favour increasing taxes to
cope with the current fiscal crisis?
Right: Would you favour increasing taxes to
cope with the current fiscal problem?

Ambiguity of wording
Wrong: About what time do you ordinarily
eat dinner?
Right: About what time do you ordinarily
dine in the evening?
172

Instrument error
Double-barrelled questions
Wrong: Do you regularly take vitamins to avoid getting
sick?
Right: Do you regularly take vitamins? Why or why
not?

Leading questions
Wrong: Dont you see some danger in the new policy?
Right: Do you see any danger in the new policy?

Loaded questions
Wrong: Do you advocate a lower speed limit to save
human lives?
Right: Does traffic safely require a lower speed limit?
173

Respondent error
Social desirability
Response based on what is perceived as being socially
acceptable or respectable.

Acquiescence
Response based on respondents perception of what
would be desirable to the sponsor.

Yea- and nay-saying

Response influenced by the global tendency toward
positive or negative answers.

Prestige
Response intended to enhance the image of the
respondent in the eyes of others.
174

Respondent error
Threat
Response influenced by anxiety or fear
instilled by the nature of the question.

Hostility
Response arising from feelings of anger or
resentment engendered by the response task.

Auspices
Response dictated by the image or opinion of
the sponsor rather than the actual question.

175

Respondent error
Mental set
Cognitions or perceptions based on previous
items influence response to later ones.

Order
The sequence in which a series is listed
affects the responses to the items.

Extremity
Clarity of extremes and ambiguity of midrange options encourage extreme
responses.
176

Ref: Biemer & Lyberg

(2003)

Type

Error reduction
Method

Coverage error

Identify which cases are missing from the sampling frame

Use multiple sampling frames
Remove duplicates and erroneous inclusions from a frame

Non-response error

Theories of survey participation (Cialdini, 1990; Groves &

Couper 1998):
reciprocation (e.g. incentive),
consistency (e.g. data vs personal and social benefits),
social validation (e.g. participation of similar respondents),
authority (e.g. reputation),
scarcity (e.g. rare opportunities), and
liking (e.g. interviewers are similar to respondents).
Tailored design method (TDM) by Dillman, Smyth, & Christian
(2009)
Guarantee privacy and confidentiality
Reduction of respondents burden

Sampling error

Use probability sampling

Weight cases for non-probability sampling

Interviewer,
respondent, and
instrument error

Use latent variable models (e.g. SEM, IRT, or LCM)

Train interviewers
Thoroughly develop instruments
Use scales that capture bias
Use indirect questions

Mode error

Use multitraitmultimethod (MTMM)

177

Internal consistency

Cronbachs is internal consistency based on inter-item correlation.

Split-half reliability is to randomly separate measurement into two parts in
order to calculate correlation between them. It assumes variance in each part
is equal. This option produces SpearmanBrown split-half reliability coefficient
and Guttman split-half reliability coefficient.
Guttmans lower bounds calculates six reliability coefficients:
1: an intermediate coefficient used to calculate other
2: coefficient which is more complex than Cronbachs
3: an equivalent version of Cronbachs
4: Guttman split-half reliability
5: recommended when a single item is highly correlated with others,
which lack high correlation among themselves
6: recommended when inter-item correlation is low in relation to square
multiple correlation
Parallel model assumes equal variance among items and among their error
Strict parallel model assumes equal variance among items and among their
error and items have equal mean
178

Internal consistency
Internal
consistency assumes factor loadings

of all items are equal (i.e. essentially

-equivalent model). When this assumption is
met, internal consistency is reliability (Novick
& Lewis, 1967). However, when this
assumption is violated, internal consistency
under-estimates reliability.
Internal consistency assumes unidimensionality. As a result, its value will
increase even though random items are
thrown into the analysis.
179

5-min exercise: Internal consistency

1.Calculate Cronbachs (Analyze
Scale Reliability Analysis) based
on the results that you have from
CFA. Then try to add any item in a
subsequent analysis and observe
how its value changes.

180

Construct reliability
When
a model is not essentially

-equivalent model (i.e. congeneric

model), coefficient is recommended
Hancock & Mueller (2001).
Coefficient H has a good theoretical
property that its value is not less than
the most reliable item in the
construct.
The formula is
181

5-min exercise: Construct reliability

1.Calculate coefficient H using the
spread sheet and factor loadings
from CFA.
2.Observe the differences in values
between Cronbachs and coefficient
H.

182

Use of reliability index

To
report construct reliability
To be used as a priori parameter values
(i.e. factor loading and error variance),
especially for creating a composite
variable (i.e. parcelling)
Munck (1979) demonstrates that you may
use a single-indicator factor and still
makes a model identified by calculating a
factor loading () and error variance () with
the following formulae:
183

Up to this point
Before conducting SEM, you must
ensure that:
All factors hold construct validity,
reliability, and uni-dimensionality.
All items hold uni-dimensionality.
Preferably, each factor has local
independence (i.e. absence of
correlation between errors).

184

30-min exercise: SEM

1. Create a structural model to test the
following hypotheses:
Security positively affects trust.
Web design positively affects trust.
Web design positively affects security.

2. You may also try to combine SEM

with multiple-group analysis or
invariance analysis.
185

186

SEM method

187

SEM method
1. Conceptualisation: This is done during literature review
or following a subsequent study. Theories are used to
explain a phenomenon.
2. Instrumentation: Concepts are linked into manifest
variables to create an instrument and a procedure for
data collection.
3. Identification: A model must be guaranteed that it will be
identified. If it is not, then an additional variable must be
included.
4. Mensuration: Data are collected while minimising
measurement error.
5. Preparation: Data are collated, cleaned, and structured
in a format supported by software.
188

SEM methodology
6. Specification: A model is specified properly in
software. The difficulty level depends on which
software and analysis are used.
7. Estimation: An appropriate estimator is chosen and
used. Different estimators have different statistical
assumptions and require different sample sizes.
Estimators sometimes are limited by types of
analysis.
8. Evaluation: A model is evaluated at both model
and parameter levels that it fits data. It is often
done in the following procedures: EFA, CFA, and
SEM.
189

SEM methodology
9.
In practice, a model often does not fits
Rectification:

data (e.g. ) and needs to be respecified. MI is

normally used as a tool to identify a cause of misfit.
After a model is respecified, it needs to be evaluated.
10.Alternation: In some disciplines, fitting a model is not
a goal. In fact, no one can prove that the fitted model
is the true one. Since SEMs condition is overidentified, countless models can fit data. It is
encouraged that a researcher also recognises and
identifies an alternative hypothesis to explain a
phenomenon. This can be achieved in 3 ways: nested
model, equivalent model, and competitive model.
190

SEM methodology
11.Selection: After original and
alternative models have been fitted,
one model must be selected to
represent a phenomenon.
12.Explanation: A fitted, and selected,
model must be explained. This also
includes correlation between error
terms.
191

References
Alreck, P. L., & Settle, R. B. (2003). The survey research handbook (3rd ed.). New York, NY, USA: McGrawHill/Irwin.
Bentler, P. M. (1980). Multivariate analysis with latent variables: Causal modeling. Annual Review of Psychology,
31(1), 419456.
Biemer, P. P., & Lyberg, L. E. (2003). Introduction to survey quality. Hoboken, NJ, USA: John Wiley & Sons, Inc.
Bollen, K. A. (1989). Structural equations with latent variables. New York, NY, USA: Wiley.
Borsboom, D. (2005). Measuring the mind: Conceptual issues in contemporary psychometrics. Cambridge, UK:
Cambridge University Press.
Bunge, M. (2009). Causality and modern science (4th ed.). New Brunswick, NJ, USA: Transaction Publishers.
Chrisman, N. R. (1995). Beyond Stevens: A revised approach to measurement for geographic information. In 13th
International Symposium on Computer-Assisted Cartography (pp. 271280). Presented at the 13 th International
Symposium on Computer-Assisted Cartography, Charlotte, NC, USA.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and
measurement error. Journal of Marketing Research, 18, 3950.
Gerbing, D. W., & Anderson, J. C. (1984). On the meaning of within-factor correlated measurement errors. The
Journal of Consumer Research, 11(1), 572580.
Goodhue, D., Lewis, W., & Thompson, R. (2006). PLS, small sample size, and statistical power in MIS research.
Presented at the Hawaii International Conference on System Sciences, IEEE.
Graham, J. M. (2006). Congeneric and (essentially) tau-equivalent estimates of score reliability: What they are
and how to use them. Educational and Psychological Measurement, 66(6), 930944.
Groves, R. M. (2004). Survey errors and survey costs. Hoboken, NJ, USA: John Wiley & Sons, Inc.
Hancock, G.R. and R.O. Mueller (2001). Rethinking Construct Reliability Within Latent Variable Systems. In
Cudeck, R., S. Du Toit, and D. Sbom (eds.). Structural Equation Modeling: Present and Future, Lincolnwood:
Scientific Software International, Inc., pp. 195216.

192

References
Hayduk, L. A., Robinson, H. P., Cummings, G. G., Boadu, K., Verbeek, E. L., & Perks, T. A. (2007). The weird world, and
equally weird measurement models: Reactive indicators and the validity revolution. Structural Equation Modeling,
14(2), 280310.
Haynes, S. N., Richard, D. C., & Kubany, E. S. (1995). Content validity in psychological assessment: a functional
approach to concepts and methods. Psychological Assessment, 7(3), 238247.
Jaccard, J., & Jacoby, J. (2009). Theory construction and model-building skills: A practical guide for social scientists.
New York, NY, USA: The Guilford Press.
Jreskog, K. G. (1978). Structural analysis of covariance and correlation matrices. Psychometrika, 43(4), 443477.
Lance, C. E. (1988). Residual centering, exploratory and confirmatory moderator analysis, and decomposition of
effects in path models containing interactions. Applied Psychological Measurement, 12(2), 163175.
Lindell, M. K. (2001). Assessing and testing interrater agreement on a single target using multi-item rating scales.
Applied Psychological Measurement, 25(1), 8999.
Lindell, M. K., & Brandt, C. J. (1999). Assessing interrater agreement on the job relevance of a test: A comparison of
CVI, T, rWG(J), and r*WG(J) indexes. Journal of Applied Psychology, 84(4), 640.
Lindell, M. K., Brandt, C. J., & Whitney, D. J. (1999). A revised index of interrater agreement for multi-item ratings of a
single target. Applied Psychological Measurement, 23(2), 127135.
MacCallum, R. C., Browne, M. W., & Sugawara, H. M. (1996). Power analysis and determination of sample size for
covariance structure modeling. Psychological Methods, 1(2), 130149.
Molla, A., Cooper, V., & Pittayachawan, S. (2011). The green IT readiness (g-readiness) of organizations: An
exploratory analysis of a construct and instrument. Communications of the Association for Information Systems,
29(1), 6796.
Mulaik, S. A. (1998). Parsimony and model evaluation. The Journal of Experimental Education, 66(3), 266273.
Munck, I. M. E. (1979). Model building in comparative education: Applications of the LISREL method to cross-national
survey data. International Association for the Evaluation of Educational Achievement Monograph Series No. 10.
Stockholm: Almqvist & Wiksell.

193

References
Novick, M. R., & Lewis, C. (1967). Coefficient alpha and the reliability of composite measurements.
Psychometrika, 32(1), 113.
Oconnor, B. P. (2000). SPSS and SAS programs for determining the number of components using
parallel analysis and Velicers MAP test. Behavior Research Methods, Instruments, & Computers,
32(3), 396402. Springer.
Patil, V. H., Singh, S. N., Mishra, S., & Todd Donavan, D. (2008). Efficient theory development and
factor retention criteria: Abandon the eigenvalue greater than one criterion. Journal of Business
Research, 61(2), 162170.
Pearl, J. (1995). Causal diagrams for empirical research. Biometrika, 82(4), 669688.
Pearl, J. (1998). Graphs, causality, and structural equation models. Sociological Methods & Research,
27(2), 226284.
Pitt, M. A., & Myung, I. J. (2002). When a good fit can be bad. TRENDS in Cognitive Sciences, 6(10),
421425.
Russell, B. (1903). Principles of mathematics. Cambridge, UK: Cambridge University Press.
Schmidt, F. L., & Hunter, J. E. (1997). Eight common but false objections to the discontinuation of
significance testing in the analysis of research data. In L. L. Harlow, S. A. Mulaik, & J. H. Steiger
(Eds.), What if there were no significance tests? (pp. 3764). Mahwah, NJ, USA: Lawrence Erlbaum
Associates, Inc.
Wright, S. (1923). The theory of path coefficients: A reply to Niles's criticism. Genetics, 8(3), 239
255.
Yu, C.-Y. (2002). Evaluating cutoff criteria of model fit indices for latent variable models with binary
and continuous outcomes. PhD, University of California, Los Angeles, Los Angeles.

194