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Comparing estimators for latent interaction models under structural and distributional misspecifications
Holger Brandt1, Nora Umbach2, Augustin Kelava3
1Department of Psychology.
Structural equation models with latent variable interactions face bias when misspecified. The model-implied instrumental variable 2-stage least square estimator (MIIV-2SLS) showed less bias for non-scaling indicator misspecifications, but all methods failed when scaling indicators were misspecified.
Area of Science:
- Quantitative Psychology
- Structural Equation Modeling
- Statistical Methods
Background:
- Structural equation models (SEMs) with latent variable interactions are widely used.
- Existing research on estimation methods has not sufficiently addressed structural misspecification.
- Misspecification, particularly involving scaling indicators, can significantly impact model estimation.
Purpose of the Study:
- To compare the performance of four estimation methods under structural misspecification in SEMs with latent variable interactions.
- To evaluate the impact of measurement model misspecifications, including those involving scaling indicators, on parameter bias and RMSE.
- To identify which estimation method is most robust to different types of structural misspecification.
Main Methods:
- A Monte Carlo simulation study was conducted.
- Four estimators were compared: model-implied instrumental variable 2-stage least square (MIIV-2SLS), 2-stage method of moments (2SMM), nonlinear structural equation mixture model (NSEMM), and unconstrained product indicator (UPI).
- The simulation varied factors such as structural misspecification (involving scaling indicator or not), misspecification size, data normality, indicator reliability, and sample size.
Main Results:
- For misspecifications not involving the scaling indicator, MIIV-2SLS exhibited less bias than 2SMM, NSEMM, and UPI.
- Indicator reliability influenced RMSE; MIIV-2SLS showed higher RMSE with low reliability.
- When scaling indicators were misspecified, all estimators were severely biased, with MIIV-2SLS showing the largest bias, particularly for linear effects.
Conclusions:
- Structural misspecification, especially omitting cross-loadings of scaling indicators, can severely damage SEM estimation.
- No single estimator is universally superior across all conditions.
- Researchers must pay close attention to scaling indicators, particularly when indicator reliability is low.
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