Structural Equation
Structural Equation Models (SEM) encourages confirmatory rather than
exploratory modeling; thus, it is suited to theory testing rather than
theory development. It usually starts with a hypothesis,
represents it as a model, operationalises the constructs of interest
with a measurement instrument, and tests the model. The causal
assumptions embedded in the model often have falsifiable implications
which can be tested
against the data. With an accepted theory or otherwise confirmed model,
SEM can also be used inductively by specifying the model and using data
to estimate the values of free parameters. Often the initial hypothesis
requires adjustment in light of model evidence, but SEM is rarely used
purely for exploration.
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