Structural equation modelling

Structural Equation Modeling (SEM) is a powerful technique that can combine complex path or simultaneous equation models with latent variables measured by a factor analysis model. This general approach includes Confirmatory Factor Analysis Models and Simultaneous Regression Models as special cases and can be extended to multiple populations, hierarchical data structures and non-metric variables. Thurstone or Maxwell and Lawley's Factor Analysis and Sewall Right's Path analysis can be considered as forerunners of these models. The general model was the result of a conference summoned by Goldberger (1971) where for the first time measurement relationships between observable indicators and their underlying constructs' psychometrics- got the same attention as the substantive relationship between constructs' econometrics.