IDEAS home Printed from https://ideas.repec.org/a/sae/somere/v20y1992i3p291-320.html
   My bibliography  Save this article

Assumptions of the Two-Step Approach to Latent Variable Modeling

Author

Listed:
  • CLAES FORNELL

    (University of Michigan)

  • YOUJAE YI

    (University of Michigan)

Abstract

Although methods for latent variable modeling that allow a joint analysis of measurement and theory have become popular, they are not without difficulties. As these difficulties have become more apparent, several researchers have recently called for a “two-step approach†to latent variable modeling in which measurement is evaluated separately from theory. This implies that programs for covariance structure analysis are not needed because factor analysis and regressions would suffice for analysis. Before a return to earlier practice using seemingly simpler analysis tools can be recommended, it seems prudent to consider the assumptions underlying a two-step approach. At least four implicit assumptions can be identified: (a) theory and measurement are independent, (b) results of factor analysis specifications can be generalized to other specifications, (c) the estimators have desirable statistical properties, and (d) the statistical test in one step is independent of the test in the other. The authors show that these assumptions cannot be met in general and that some of them are logically inconsistent. Thus any wholesale adoption of a two-step approach could have serious consequences.

Suggested Citation

  • Claes Fornell & Youjae Yi, 1992. "Assumptions of the Two-Step Approach to Latent Variable Modeling," Sociological Methods & Research, , vol. 20(3), pages 291-320, February.
    • Handle: RePEc:sae:somere:v:20:y:1992:i:3:p:291-320
    DOI: 10.1177/0049124192020003001
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0049124192020003001
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0049124192020003001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bagozzi, Richard P, 1983. "Issues in the Application of Covariance Structure Analysis: A Further Comment," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(4), pages 449-450, March.
    2. Albert Satorra & Willem Saris, 1985. "Power of the likelihood ratio test in covariance structure analysis," Psychometrika, Springer;The Psychometric Society, vol. 50(1), pages 83-90, March.
    3. James Steiger & Alexander Shapiro & Michael Browne, 1985. "On the multivariate asymptotic distribution of sequential Chi-square statistics," Psychometrika, Springer;The Psychometric Society, vol. 50(3), pages 253-263, September.
    4. Louis Guttman, 1971. "Measurement as structural theory," Psychometrika, Springer;The Psychometric Society, vol. 36(4), pages 329-347, December.
    5. Ray Pawson, 1980. "Empiricist measurement strategies: A critique of the multiple indicator approach to measurement," Quality & Quantity: International Journal of Methodology, Springer, vol. 14(5), pages 651-678, October.
    6. Hans-Hermann Hoppe, 1980. "On how not to make inferences about measurement error," Quality & Quantity: International Journal of Methodology, Springer, vol. 14(4), pages 503-510, August.
    7. P. Bentler, 1986. "Structural modeling and psychometrika: An historical perspective on growth and achievements," Psychometrika, Springer;The Psychometric Society, vol. 51(1), pages 35-51, March.
    8. Fornell, Claes, 1983. "Issues in the Application of Covariance Structure Analysis: A Comment," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(4), pages 443-448, March.
    9. Patrick Horan, 1989. "Causal models of measurement: some problems for theory construction," Quality & Quantity: International Journal of Methodology, Springer, vol. 23(1), pages 39-59, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. López Caro, Cristina María & Fernández Aguirre, María Carmen & Mariel Chladkova, Petr, 2002. "Índices de Satisfacción del Consumidor: una aplicación de Modelos de Ecuaciones Estructurales a la Industria Automovilística Española," BILTOKI 1134-8984, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
    2. Arash Rezazadeh & Niloofar Nobari, 2018. "Antecedents and consequences of cooperative entrepreneurship: a conceptual model and empirical investigation," International Entrepreneurship and Management Journal, Springer, vol. 14(2), pages 479-507, June.
    3. Frambach, R.T. & Prabhu, J.C. & Verhallen, T.M.M., 1998. "The influence of business strategy on market orientation and new product activity," Discussion Paper 1998-91, Tilburg University, Center for Economic Research.
    4. Xing Aijing & Nobuhiko Terui & P.K.Kannan, 2016. "How customer satisfaction affects loyalty: Insights from nonlinear hierarchical Bayes modeling of customer satisfaction index," TMARG Discussion Papers 124, Graduate School of Economics and Management, Tohoku University.
    5. de Jong, A. & Dijk, R., 1998. "Determinants of Leverage and Agency problems," Discussion Paper 1998-82, Tilburg University, Center for Economic Research.
    6. Colin C. J. Cheng, 2020. "Sustainability Orientation, Green Supplier Involvement, and Green Innovation Performance: Evidence from Diversifying Green Entrants," Journal of Business Ethics, Springer, vol. 161(2), pages 393-414, January.
    7. Diamantopoulos, Adamantios, 2010. "Reflective and formative metrics of relationship value: Response to Baxter's commentary essay," Journal of Business Research, Elsevier, vol. 63(1), pages 91-93, January.
    8. Hallak, Rob & Brown, Graham & Lindsay, Noel J., 2012. "The Place Identity – Performance relationship among tourism entrepreneurs: A structural equation modelling analysis," Tourism Management, Elsevier, vol. 33(1), pages 143-154.
    9. Wynne W. Chin & Barbara L. Marcolin & Peter R. Newsted, 2003. "A Partial Least Squares Latent Variable Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation Study and an Electronic-Mail Emotion/Adoption Study," Information Systems Research, INFORMS, vol. 14(2), pages 189-217, June.
    10. Frambach, Ruud T. & Prabhu, Jaideep & Verhallen, Theo M.M., 2000. "The influence of business strategy on new product activity : the mediating role of market orientation," Serie Research Memoranda 0034, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Piotr Tarka, 2018. "An overview of structural equation modeling: its beginnings, historical development, usefulness and controversies in the social sciences," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 313-354, January.
    2. Ke-Hai Yuan & Peter Bentler, 2006. "Mean Comparison: Manifest Variable Versus Latent Variable," Psychometrika, Springer;The Psychometric Society, vol. 71(1), pages 139-159, March.
    3. Albert Satorra, 1989. "Alternative test criteria in covariance structure analysis: A unified approach," Psychometrika, Springer;The Psychometric Society, vol. 54(1), pages 131-151, March.
    4. P. M. Bentler & Chih-Ping Chou, 1990. "Model Search With TETRAD II and EQS," Sociological Methods & Research, , vol. 19(1), pages 67-79, August.
    5. Patrick J. Curran & Kenneth A. Bollen & Feinian Chen & Pamela Paxton & James B. Kirby, 2003. "Finite Sampling Properties of the Point Estimates and Confidence Intervals of the RMSEA," Sociological Methods & Research, , vol. 32(2), pages 208-252, November.
    6. P. M. Bentler & Chih-Ping Chou, 1987. "Practical Issues in Structural Modeling," Sociological Methods & Research, , vol. 16(1), pages 78-117, August.
    7. Breitsohl, Jan & Garrod, Brian, 2016. "Assessing tourists' cognitive, emotional and behavioural reactions to an unethical destination incident," Tourism Management, Elsevier, vol. 54(C), pages 209-220.
    8. Ke-Hai Yuan & Peter M. Bentler & Wei Zhang, 2005. "The Effect of Skewness and Kurtosis on Mean and Covariance Structure Analysis," Sociological Methods & Research, , vol. 34(2), pages 240-258, November.
    9. Yuan, Ke-Hai & Hayashi, Kentaro & Bentler, Peter M., 2007. "Normal theory likelihood ratio statistic for mean and covariance structure analysis under alternative hypotheses," Journal of Multivariate Analysis, Elsevier, vol. 98(6), pages 1262-1282, July.
    10. Alta Arapi & Ercole Vellone & Dhurata Ivziku & Blerina Duka & Dasilva Taci & Ippolito Notarnicola & Alessandro Stievano & Emanuela Prendi & Gennaro Rocco & Maddalena De Maria, 2023. "Psychometric Characteristics of the Self-Care of Chronic Illness Inventory in Older Adults Living in a Middle-Income Country," IJERPH, MDPI, vol. 20(6), pages 1-15, March.
    11. Maddalena De Maria & Federico Ferro & Davide Ausili & Rosaria Alvaro & Maria Grazia De Marinis & Stefania Di Mauro & Maria Matarese & Ercole Vellone, 2020. "Development and Psychometric Testing of the Self-Care in COVID-19 (SCOVID) Scale, an Instrument for Measuring Self-Care in the COVID-19 Pandemic," IJERPH, MDPI, vol. 17(21), pages 1-12, October.
    12. Fetene B. Tekle & Dereje W. Gudicha & Jeroen K. Vermunt, 2016. "Power analysis for the bootstrap likelihood ratio test for the number of classes in latent class models," Advances in Data Analysis and Classification, Springer;German Classification Society - Gesellschaft für Klassifikation (GfKl);Japanese Classification Society (JCS);Classification and Data Analysis Group of the Italian Statistical Society (CLADAG);International Federation of Classification Societies (IFCS), vol. 10(2), pages 209-224, June.
    13. Luengo, María Jesús & Obeso, María, 2013. "Efeito da hélice tríplice em desempenho de inovação," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 53(4), July.
    14. Norman Cliff, 1989. "Ordinal consistency and ordinal true scores," Psychometrika, Springer;The Psychometric Society, vol. 54(1), pages 75-91, March.
    15. Jinshu Cui & Heather Rosoff & Richard S. John, 2018. "Public Response to a Near‐Miss Nuclear Accident Scenario Varying in Causal Attributions and Outcome Uncertainty," Risk Analysis, John Wiley & Sons, vol. 38(5), pages 947-961, May.
    16. Wai Chan & Peter M. Bentler, 1993. "The Covariance Structure Analysis of Ipsative Data," Sociological Methods & Research, , vol. 22(2), pages 214-247, November.
    17. Ke-Hai Yuan & Wai Chan, 2005. "On Nonequivalence of Several Procedures of Structural Equation Modeling," Psychometrika, Springer;The Psychometric Society, vol. 70(4), pages 791-798, December.
    18. Farzanegan, Mohammad Reza, 2009. "Illegal trade in the Iranian economy: Evidence from a structural model," European Journal of Political Economy, Elsevier, vol. 25(4), pages 489-507, December.
    19. Lawrence S. Mayer & Steven S. Carroll, 1988. "Measures of Dependence for Cross-Lagged Panel Models," Sociological Methods & Research, , vol. 17(1), pages 93-120, August.
    20. Hugo Horta & João M. Santos, 2016. "An instrument to measure individuals’ research agenda setting: the multi-dimensional research agendas inventory," Scientometrics, Springer;Akadémiai Kiadó, vol. 108(3), pages 1243-1265, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:somere:v:20:y:1992:i:3:p:291-320. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.