Latent Variable Path Analysis: In: Using Mplus For Structural Equation Modeling: A Researcher's Guide

Latent Variable Path Analysis
In: Using Mplus for Structural Equation Modeling: A

Researcher’s Guide
By: Kelloway E. Kevin

Pub. Date: 2017
Access Date: May 16, 2020
Publishing Company: SAGE Publications, Inc.
City: Thousand Oaks
Print ISBN: 9781452291475
Online ISBN: 9781483381664
DOI: https://dx.doi.org/10.4135/9781483381664
Print pages: 129-150
© 2015 SAGE Publications, Inc. All Rights Reserved.
This PDF has been generated from SAGE Research Methods. Please note that the pagination of the
online version will vary from the pagination of the print book.
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2015 SAGE Publications, Ltd. All Rights Reserved.
The true power of structural equation modeling is the ability to estimate a complete model incorporating both
measurement and structural considerations. In this chapter, we consider such a latent variable path analysis.
Thus, in conducting the analysis, we will be equally concerned with assessing the proposed measurement
relations (i.e., through confirmatory factor analysis) and the proposed structural relations (i.e., through path
analysis). Although latent variable models can be complex, in actuality we are merely combining techniques
we have covered in previous chapters. Moreover, although I will not be repeating this material, testing equality
constraints, mediation, and multisample models can all be implemented with latent variables, just as they
were with observed variable path analyses in the preceding chapter.
Model Specification
To illustrate the use of latent variable path analysis, we will consider the model presented in Figure 7.1. There
are two components to the model. First, the structural model specifies the predictive relationships among
the latent variables. Second, the measurement model defines how the latent variables are measured (i.e.,
represented by indicators).
The structural model we were interested in was based on the hypotheses that individuals who experience
injustice in the workplace would be less affectively committed to the organization. In turn, organizational
commitment would predict employees’ participation in the safety program. Each of these constructs is
represented by three indicator (or observed) variables.
In addition to the structural relations, we also were interested in using latent variables; that is, each construct
in the model would be represented by multiple indicators. Bentler (1980) noted that “choosing the right
number of indicators for each LV [latent variable] is something of an art; in principle, the more the better; in
practice, too many indicators make it difficult if not impossible to fit a model to data” (p. 425).
Figure 7.1

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Moreover, as noted in Chapter 5, Bollen (1989) suggested that a confirmatory factor analysis model (which
uses indicators to represent latent variables or factors) should incorporate at least two, preferably three,
indicators per latent variable. Researchers can mix “levels” of operationalization in choosing indicators for
their models. In the current example, the three justice indicators are measures of distributive, procedural, and
interactional injustice. The indicators of affective commitment are item parcels (see Chapter 5) formed from
Allen and Meyer’s (1990) affective commitment measure. The three safety indicators are single items, each
assessing participation in a particular aspect of the safety program (e.g., attend training, attend meetings).
Alternative Model Specifications
The central hypothesis of our model is that commitment mediates the relationship between injustice and
safety participation. Consistent with the discussion of mediated relationships in the previous chapter, two
plausible rival model specifications are the partially mediated (which adds a path from injustice to safety
participation; see Figure 7.2) and nonmediated (which deletes the path from affective commitment to safety
participation; see Figure 7.3) models.
Model Testing Strategy
There is a major complication in testing latent variable models. If the model does not fit, the lack of fit can be
attributable to an ill-fitting measurement model, an ill-fitting structural model, or both (Anderson & Gerbing,
1988). Accordingly, Anderson and Gerbing (1988) recommended a strategy of two-stage modeling in which
one first assesses the fit of the measurement model and then moves to a consideration of the structural model
(see Williams, Vandenberg, & Edwards, 2009, for a similar view).
Figure 7.2

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Figure 7.3
The strategy is based on the observation that the latent variable structural model incorporates the
measurement model. In fact, at least with respect to the relationships among the latent variables, one can
think of the measurement model as a saturated or just-identified model. That is, the measurement model
allows a relationship (i.e., a correlation; see Figure 7.2) between each pair of latent variables.
This being the case, the fit of the measurement model provides a baseline for the fit of the full latent variable
model. The full model, incorporating both structural and measurement relationships, cannot provide a better
fit to the data than does the measurement model.
Incorporating Anderson and Gerbing’s (1988) suggestions with our three hypothesized structural models
suggests a sequence of model tests in which we first establish the fit of the measurement model and then
move to a consideration of the structural parameters of interest. The remainder of this chapter, therefore,
provides the assessment of the measurement model, followed by assessment of the full model.
The Mplus code for the measurement model simply defines three latent variables, each indicated by three
observed variables:
The output from this file is shown below. As you will see, the measurement model provides a reasonable fit
to the data. The comparative fit index (CFI) exceeds .95, and the root mean square error of approximation
(RMSEA) test of close fit is nonsignificant.

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Note: Mplus repeats the command file and reports on the data read into the program. As shown, there
are 298 cases in one group. The model comprises three latent and nine observed variables.

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Note: The measurement model provides quite a reasonable fit to the data. Both the CFI and the
Tucker-Lewis index (TLI) exceed .95, the SRMR and the RMSEA are both less than .08, and the test
for close fit is nonsignficant. Although the χ 2 value is significant, it is not overly large, and the other
indices suggest a good-fitting model.

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Note: Consistent with the fit of the model, all of the estimated parameters are significant. Recall that
Mplus fixes the first factor loading on each latent variable to be 1.00 to establish a metric for the latent
variable.

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Note: These are the standardized parameters I would report in a results section. Note that because
the STDYX estimates standardize the latent variables, the variances of the latent variables are fixed
to 1.00, and the first factor loading on each latent variable is estimated.

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Note: The modification indices suggest several changes to improve the fit of the model. Although
most of these changes would likely reduce the χ 2 value to nonsignificance, I am not likely to
incorporate any of the suggestions. Consideration of the changes suggests that they are not
consistent with any theory; they largely involve the estimation of residual correlations or predictive
relationships among the observed variables. Because the model provides an acceptable fit, and the
changes do not make conceptual sense, I opt not to change the model.
Note that in the measurement model, the three latent variables are simply correlated with one another. That
is, Mplus treats the three latent variables as exogenous variables and, by default, estimates the correlations
among the latent variables. To test the structural model, we need only to add the ON statements to the
MODEL command, as shown below. Doing so removes the correlations estimated in the previous analyses
(because two of the latent variables are now endogenous) and adds the predictive relationships we specify.

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Note: The command file first defines the three latent variables (the BY statements) and then specifies
the structural relationships (the ON statements). This analysis estimates the fully mediated model.

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Note: The model provides an “okay” but not outstanding fit to the data. The CFI and TLI exceed or
equal .95, and the RMSEA is less than .08. However, the χ 2 value is significant, as is the test of close
fit.

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Note: This is the measurement part of the model. All estimated parameters are significant.
Note: This is the structural component of the model. Again, both estimated parameters are significant.

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I proceeded to test the partially mediated and nonmediated models (Figures 7.2 and 7.3), and the fit indices
for all tested models are shown in Table 7.1. The measurement model and the partially mediated model
provide, in this case, exactly the same fit to the data. This is because the structural component of the model
is saturated or just identified. Although the model as a whole is overidentified, the overidentification comes
from the measurement component of the model rather than from the structural elements of the model.
The fully mediated model is nested within the partially mediated model, so we can assess the difference in
model fit using a chi-square difference test. In this case, the partially mediated model provides a better fit to
the data, χ2difference(1) = 12.17, p < .01. The nonmediated model is also nested within the partially mediated
model, and the two models provide the same level of fit to the data, χ2difference(1) = 0.93, ns. Although the
models fit the data equally well, the nonmediated model has 1 fewer degree of freedom (i.e., has one fewer
estimated parameter in the model), making it the more parsimonious model. Therefore, this is the model I
would choose to retain.
The command file for the nonmediated model is presented below. Note that I had to specify that the
correlation between affective commitment and safety participation was zero. By default, Mplus will estimate
this correlation, resulting in a different version of the saturated model. It is always important to check the
output file to ensure that the model being estimated is the one you think is being estimated.

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Table 7.1 Fit Indices for the Four Models
Sample Results
Descriptive statistics and intercorrelations for all study variables are presented in Table 7.2. All models
were estimated using Mplus 7.1 (Muthén & Muthén, 1998-2013) and were based on maximum likelihood
estimation.
Four models were estimated. First the measurement model defined three latent variables, each indicated by
three observed variables. Then the structural models previously described as the fully mediated (Figure 7.1),
partially mediated (Figure 7.2), and nonmediated (Figure 7.3) models were estimated.

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Table 7.2 Descriptive Statistics and Intercorrelations for All Study Variables
Results of these analyses are presented in Table 7.1. As shown, the measurement model, partially mediated
model, and nonmediated models all provided acceptable fits to the data. The fully mediated model provided a
worse fit to the data than did the partially mediated model, χ2difference(1) = 12.17, p < .01. The nonmediated
and partially mediated models provided the same level of fit to the data, χ2difference(1) = 0.93, ns. Therefore,
the latter was retained as the best fitting, most parsimonious model. Standardized results for the nonmediated
model are presented in Figure 7.4. As shown, perceptions of organizational injustice predicted both affective
commitment to the organization (β = .64, p < .01) and participation in safety programs (β = .38, p < .01)

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Figure 7.4
http://dx.doi.org/10.4135/9781483381664.n7

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Latent Variable Path Analysis

In: Using Mplus for Structural Equation Modeling: A

By: Kelloway E. Kevin