The Metric of the Latent Variables in a LISREL-IV Analysis

Abstract

A potential source of confusion in the interpretation of a LISREL-IV analysis is the metric of the latent variables. This paper demonstrates that fixing the pattern coefficient of one of the indicators of each latent variable to 1.0 results in an arbitrary and meaningless metric which is usually different for each latent variable. Since many of the parameter estimates such as the pattern coefficients, the factor loadings, and the variance-covariance matrix of the latent variables are a function of the metric of the latent variables, much of the LISREL-IV output may be uninterpretable. This paper demonstrates how to specify a priori the variances of the latent variables in a LISREL-IV analysis.