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By Ralph L. Levine, Hiram E. Fitzgerald (auth.), Ralph L. Levine, Hiram E. Fitzgerald (eds.)

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This implies that the values of the structural parameters are stationary over the specified time horizon and that the variables are in equilibrium. Thus, given the causal interval specified in considering the causal order and direction of the hypothesized relationships, one must allow sufficient time for a change in one variable to work its way throughout the system of structural equations when collecting data. , 1982). Again, the importance of the time required for a change in one variable to complete its influence on all subsequent hypothesized relationships is apparent.

319-339. Hunter. J. E.. & Gerbing. D. W. (1982). Unidimensional measurement. second order factor analysis. and causal models. In B. M. Staw & 1. 1. ). Research in Organizational Behavior. Vol. 4 (pp. 267-320). Intriligator. M. D. (1978). Econometric models. techniques. and applicotions. Englewood Cliffs. NJ: Prentice-Hall. James. L. R. (1980). The unmeasured variables problem in path analysis. Journal of Applied Psychology. 65. 415-421. James. 1. R.. & Jones. A. P. (1980). Perceived job characteristics and job satisfaction: An examination of reciprocal causation.

Psi represents unaccounted-for variance in the endogenous variables on the diagonal, and the off-diagonal represents covariance among the residuals. Whether any or all of the elements in these matrices are constrained or fixed to be 0, 1, or some other value depends on the model developed. For example, based on the structural relations depicted in Figure 1, beta would be a 2 x 2 matrix in which the diagonal elements are zero indicating a variable does not cause itself. Both off-diagonal elements would be free to be estimated because it is hypothesized that Construct E causes Construct F and Construct F causes Construct E.

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