In modeling change over time, developmental theories often emphasize meaningful quantities like peaks, inflections, timing, and tempo. However, longitudinal analyses typically rely on simple polynomial models that estimate powered terms of time in a linear, additive form which are disconnected from these meaningful quantities. While these linear parameterizations are computationally efficient and produce stable results, the quantities estimated in these models are difficult to directly connect to theoretical hypotheses. To address this disconnect between estimation and theory development, I propose several approaches for linear estimation with nonlinear inference (LENI), a framework that transforms results from stable, easily-estimated linear models into nonlinear estimates which align with theoretical quantities of interest through a set of principled transformation functions. I first outline derivations for the interpretable nonlinear parameters, and transform the results of the corresponding linear model—including fixed and random effects as well as conditional covariates effects —into the results we would have obtained by fitting a nonlinear version of the model. I conclude by summarizing a linearized structural equation model approach which can flexibly accommodate any known nonlinear target function within a linearly-estimable framework. I conclude with recommendations for applied researchers and directions for fruitful future work in this area.

Ignorable likelihood (IL) approaches are often used to handle missing data when estimating a multivariate model, such as a structural equation model. In this case, the likelihood is based on all available data, and no model is specified for the missing data mechanism. Inference proceeds via maximum likelihood or Bayesian methods, including multiple imputation without auxiliary variables. Such IL approaches are valid under a missing at random (MAR) assumption. Rabe-Hesketh and Skrondal (Ignoring non-ignorable missingness. Presidential Address at the International Meeting of the Psychometric Society, Beijing, China, 2015; Psychometrika, 2023) consider a violation of MAR where a variable A can affect missingness of another variable B also when A is not observed. They show that this case can be handled by discarding more data before proceeding with IL approaches. This data-deletion approach is similar to the sequential estimation of Mohan et al. (in: Advances in neural information processing systems, 2013) based on their ordered factorization theorem but is preferable for parametric models. Which kind of data-deletion or ordered factorization to employ depends on the nature of the MAR violation. In this article, we therefore propose two diagnostic tests, a likelihood-ratio test for a heteroscedastic regression model and a kernel conditional independence test. We also develop a test-based estimator that first uses diagnostic tests to determine which MAR violation appears to be present and then proceeds with the corresponding data-deletion estimator. Simulations show that the test-based estimator outperforms IL when the missing data problem is severe and performs similarly otherwise.

The Maximum-likelihood estimator dominates the estimation of general structural equation models. Noniterative, equation-by-equation estimators for factor analysis have received some attention, but little has been done on such estimators for latent variable equations. I propose an alternative 2SLS estimator of the parameters in LISREL type models and contrast it with the existing ones. The new 2SLS estimator allows observed and latent variables to originate from nonnormal distributions, is consistent, has a known asymptotic covariance matrix, and is estimable with standard statistical software. Diagnostics for evaluating instrumental variables are described. An empirical example illustrates the estimator.

This paper considers total and direct effects in linear structural equation models. Adopting a causal perspective that is implicit in much of the literature on the subject, the paper concludes that in many instances the effects do not admit the interpretations imparted in the literature. Drawing a distinction between concomitants and factors, the paper concludes that a concomitant has neither total nor direct effects on other variables. When a variable is a factor and one or more intervening variables are concomitants, the notion of a direct effect is not causally meaningful. Even when the notion of a direct effect is meaningful, the usual estimate of this quantity may be inappropriate. The total effect is usually interpreted as an equilibrium multiplier. In the case where there are simultaneity relations among the dependent variables in tghe model, the results in the literature for the total effects of dependent variables on other dependent variables are not equilibrium multipliers, and thus, the usual interpretation is incorrect. To remedy some of these deficiencies, a new effect, the total effect of a factor X on an outcome Y, holding a set of variables F constant, is defined. When defined, the total and direct effects are a special case of this new effect, and the total effect of a dependent variable on a dependent variable is an equilibrium multiplier.

In this paper, linear structural equation models with latent variables are considered. It is shown how many common models arise from incomplete observation of a relatively simple system. Subclasses of models with conditional independence interpretations are also discussed. Using an incomplete data point of view, the relationships between the incomplete and complete data likelihoods, assuming normality, are highlighted. For computing maximum likelihood estimates, the EM algorithm and alternatives are surveyed. For the alternative algorithms, simplified expressions for computing function values and derivatives are given. Likelihood ratio tests based on complete and incomplete data are related, and an example on using their relationship to improve the fit of a model is given.

We consider models which combine latent class measurement models for categorical latent variables with structural regression models for the relationships between the latent classes and observed explanatory and response variables. We propose a two-step method of estimating such models. In its first step, the measurement model is estimated alone, and in the second step the parameters of this measurement model are held fixed when the structural model is estimated. Simulation studies and applied examples suggest that the two-step method is an attractive alternative to existing one-step and three-step methods. We derive estimated standard errors for the two-step estimates of the structural model which account for the uncertainty from both steps of the estimation, and show how the method can be implemented in existing software for latent variable modelling.

The Gibbs sampler can be used to obtain samples of arbitrary size from the posterior distribution over the parameters of a structural equation model (SEM) given covariance data and a prior distribution over the parameters. Point estimates, standard deviations and interval estimates for the parameters can be computed from these samples. If the prior distribution over the parameters is uninformative, the posterior is proportional to the likelihood, and asymptotically the inferences based on the Gibbs sample are the same as those based on the maximum likelihood solution, for example, output from LISREL or EQS. In small samples, however, the likelihood surface is not Gaussian and in some cases contains local maxima. Nevertheless, the Gibbs sample comes from the correct posterior distribution over the parameters regardless of the sample size and the shape of the likelihood surface. With an informative prior distribution over the parameters, the posterior can be used to make inferences about the parameters underidentified models, as we illustrate on a simple errors-in-variables model.

A standard approach for handling ordinal data in covariance analysis such as structural equation modeling is to assume that the data were produced by discretizing a multivariate normal vector. Recently, concern has been raised that this approach may be less robust to violation of the normality assumption than previously reported. We propose a new perspective for studying the robustness toward distributional misspecification in ordinal models using a class of non-normal ordinal covariance models. We show how to simulate data from such models, and our simulation results indicate that standard methodology is sensitive to violation of normality. This emphasizes the importance of testing distributional assumptions in empirical studies. We include simulation results on the performance of such tests.

Data in social and behavioral sciences are often hierarchically organized though seldom normal, yet normal theory based inference procedures are routinely used for analyzing multilevel models. Based on this observation, simple adjustments to normal theory based results are proposed to minimize the consequences of violating normality assumptions. For characterizing the distribution of parameter estimates, sandwich-type covariance matrices are derived. Standard errors based on these covariance matrices remain consistent under distributional violations. Implications of various covariance estimators are also discussed. For evaluating the quality of a multilevel model, a rescaled statistic is given for both the hierarchical linear model and the hierarchical structural equation model. The rescaled statistic, improving the likelihood ratio statistic by estimating one extra parameter, approaches the same mean as its reference distribution. A simulation study with a 2-level factor model implies that the rescaled statistic is preferable.

Procedures are given for determining identified parameters, finding constraints on the covariances, and checking equivalence, in acyclic (recursive) linear path models with correlated error terms (disturbances), by inspection of the path equations, aided by simple recursions. This provides a useful and general alternative to the employment of directed acyclic graph theory for such purposes.

We provide a framework for motivating and diagnosing the functional form in the structural part of nonlinear or linear structural equation models when the measurement model is a correctly specified linear confirmatory factor model. A mathematical population-based analysis provides asymptotic identification results for conditional expectations of a coordinate of an endogenous latent variable given exogenous and possibly other endogenous latent variables, and theoretically well-founded estimates of this conditional expectation are suggested. Simulation studies show that these estimators behave well compared to presently available alternatives. Practically, we recommend the estimator using Bartlett factor scores as input to classical non-parametric regression methods.

The common maximum likelihood (ML) estimator for structural equation models (SEMs) has optimal asymptotic properties under ideal conditions (e.g., correct structure, no excess kurtosis, etc.) that are rarely met in practice. This paper proposes model-implied instrumental variable – generalized method of moments (MIIV-GMM) estimators for latent variable SEMs that are more robust than ML to violations of both the model structure and distributional assumptions. Under less demanding assumptions, the MIIV-GMM estimators are consistent, asymptotically unbiased, asymptotically normal, and have an asymptotic covariance matrix. They are “distribution-free,” robust to heteroscedasticity, and have overidentification goodness-of-fit J-tests with asymptotic chi-square distributions. In addition, MIIV-GMM estimators are “scalable” in that they can estimate and test the full model or any subset of equations, and hence allow better pinpointing of those parts of the model that fit and do not fit the data. An empirical example illustrates MIIV-GMM estimators. Two simulation studies explore their finite sample properties and find that they perform well across a range of sample sizes.

In many instances it is reasonable to assume that the population covariance matrix has positive elements. This assumption implies for the single factor analysis model that the loadings and regression weights for best linear factor prediction are positive. For the multiple factor analysis model where each variable loads on a single factor and a hierarchical factor model, it implies that the loadings and the factor correlations are positive. For the latter model it also implies that the regression weights for first- and second-order factor prediction are positive.

Structural equation models with latent variables are sometimes estimated using an intuitive three-step approach, here denoted factor score regression. Consider a structural equation model composed of an explanatory latent variable and a response latent variable related by a structural parameter of scientific interest. In this simple example estimation of the structural parameter proceeds as follows: First, common factor models areseparately estimated for each latent variable. Second, factor scores areseparately assigned to each latent variable, based on the estimates. Third, ordinary linear regression analysis is performed among the factor scores producing an estimate for the structural parameter. We investigate the asymptotic and finite sample performance of different factor score regression methods for structural equation models with latent variables. It is demonstrated that the conventional approach to factor score regression performs very badly. Revised factor score regression, using Regression factor scores for the explanatory latent variables and Bartlett scores for the response latent variables, produces consistent estimators for all parameters.

We offer an introduction to the five papers that make up this special section. These papers deal with a range of the methodological challenges that face researchers analyzing fMRI data—the spatial, multilevel, and longitudinal nature of the data, the sources of noise, and so on. The papers all provide analyses of data collected by a multi-site consortium, the Function Biomedical Informatics Research Network. Due to the sheer volume of data, univariate procedures are often applied, which leads to a multiple comparisons problem (since the data are necessarily multivariate). The papers in this section include interesting applications, such as a state-space model applied to these data, and conclude with a reflection on basic measurement problems in fMRI. All in all, they provide a good overview of the challenges that fMRI data present to the standard psychometric toolbox, but also to the opportunities they offer for new psychometric modeling.

An analysis of empirical data often leads to a rejection of a hypothesized model, even if the researcher has spent considerable efforts in including all available information in the formulation of the model. Thus, the researcher must reformulate the model in some way, but in most instances there is, at least theoretically, an overwhelming number of possible actions that could be taken. In this paper a “modification index” will be discussed which should serve as a guide in the search for a “better” model. In statistical terms, the index measures how much we will be able to reduce the discrepancy between model and data, as defined by a general fit function, when one parameter is added or freed or when one equality constraint is relaxed. The modification index discussed in this paper is an improvement of the one incorporated in the LISREL V computer program in that it takes into account changes in all the parameters of the model when one particular parameter is freed.

The issue of measurement invariance commonly arises in factor-analytic contexts, with methods for assessment including likelihood ratio tests, Lagrange multiplier tests, and Wald tests. These tests all require advance definition of the number of groups, group membership, and offending model parameters. In this paper, we study tests of measurement invariance based on stochastic processes of casewise derivatives of the likelihood function. These tests can be viewed as generalizations of the Lagrange multiplier test, and they are especially useful for: (i) identifying subgroups of individuals that violate measurement invariance along a continuous auxiliary variable without prespecified thresholds, and (ii) identifying specific parameters impacted by measurement invariance violations. The tests are presented and illustrated in detail, including an application to a study of stereotype threat and simulations examining the tests’ abilities in controlled conditions.

Discretized multivariate normal structural models are often estimated using multistage estimation procedures. The asymptotic properties of parameter estimates, standard errors, and tests of structural restrictions on thresholds and polychoric correlations are well known. It was not clear how to assess the overall discrepancy between the contingency table and the model for these estimators. It is shown that the overall discrepancy can be decomposed into a distributional discrepancy and a structural discrepancy. A test of the overall model specification is proposed, as well as a test of the distributional specification (i.e., discretized multivariate normality). Also, the small sample performance of overall, distributional, and structural tests, as well as of parameter estimates and standard errors is investigated under conditions of correct model specification and also under mild structural and/or distributional misspecification. It is found that relatively small samples are needed for parameter estimates, standard errors, and structural tests. Larger samples are needed for the distributional and overall tests. Furthermore, parameter estimates, standard errors, and structural tests are surprisingly robust to distributional misspecification.

Recent research reflects a growing awareness of the value of using structural equation models to analyze repeated measures data. However, such data, particularly in the presence of covariates, often lead to models that either fit the data poorly, are exceedingly general and hard to interpret, or are specified in a manner that is highly data dependent. This article introduces methods for developing parsimonious models for such data. The underlying technology uses reduced-rank representations of the variances, covariances and means of observed and latent variables. The value of this approach, which may be implemented using standard structural equation modeling software, is illustrated in an application study aimed at understanding heterogeneous consumer preferences. In this application, the parsimonious representations characterize systematic relationships among consumer demographics, attitudes and preferences that would otherwise be undetected. The result is a model that is parsimonious, illuminating, and fits the data well, while keeping data dependence to a minimum.

A two-stage procedure is developed for analyzing structural equation models with continuous and polytomous variables. At the first stage, the maximum likelihood estimates of the thresholds, polychoric covariances and variances, and polyserial covariances are simultaneously obtained with the help of an appropriate transformation that significantly simplifies the computation. An asymptotic covariance matrix of the estimates is also computed. At the second stage, the parameters in the structural covariance model are obtained via the generalized least squares approach. Basic statistical properties of the estimates are derived and some illustrative examples and a small simulation study are reported.