Effect of outliers on estimators and tests in covariance structure analysis

A small proportion of outliers can distort the results based on classical procedures in covariance structure analysis. We look at the quantitative effect of outliers on estimators and test statistics based on normal theory maximum likelihood and the asymptotically distribution-free procedures. Even if a proposed structure is correct for the majority of the data in a sample, a small proportion of outliers leads to biased estimators and significant test statistics. An especially unfortunate consequence is that the power to reject a model can be made arbitrarily--but misleadingly--large by inclusion of outliers in an analysis.