1. GRA 6020 Multivariate Statistics The Structural Equation Model Ulf H. Olsson Professor of Statistics

2. Ulf H. Olsson Measurement Models Consequences of Measurement Error Biased estimates Does the Model fit the Data The Chi-square test The RMSEA approach Detailed evaluation of the model t.-values Reliability Validity

3. Ulf H. Olsson Cronbach’s alpha One can see from this formula that if you increase the number of items, you increase Cronbach's alpha. Additionally, if the average inter-item correlation is low, alpha will be low. As the average inter-item correlation increases, Cronbach's alpha increases as well.

4. Ulf H. Olsson Composite Reliability measure

5. Ulf H. Olsson Making Numbers Loyalty Branch Loan Savings Satisfaction

6. Ulf H. Olsson Making Numbers Loyalty Branch Loan Savings Satisfaction 0.33 0.46 0.29 0.17 0.35 0.80 0.83 0.86 0.83 0.84 0.40 0.39 0.33 0.44 0.37 0.26 0.23 0.21 0.28 0.23 Chi-sq. 1769.36 925.78 1731.09 839.83 518.94 582.91 df=182

7. Ulf H. Olsson STATISTICAL SYMBOLS - NOTATION

8. Ulf H. Olsson Making Numbers-Econometric Model

9. Ulf H. Olsson Making Numbers-Psychometric Model

10. Ulf H. Olsson Making Numbers-Psychometric Model

11. Ulf H. Olsson CFA and SEM