Structural equation models with unobservable variables and measurement error: Algebra and statistics

C Fornell, DF Larcker - 1981 - journals.sagepub.com
1981journals.sagepub.com
Several issues relating to goodness of fit in structural equations are examined. The
convergence and differentiation criteria, as applied by Bagozzi, are shown not to stand up
under mathematical or statistical analysis. The authors argue that the choice of interpretative
statistic must be based on the research objective. They demonstrate that when this is done
the Fornell-Larcker testing system is internally consistent and that it conforms to the rules of
correspondence for relating data to abstract variables.
Several issues relating to goodness of fit in structural equations are examined. The convergence and differentiation criteria, as applied by Bagozzi, are shown not to stand up under mathematical or statistical analysis. The authors argue that the choice of interpretative statistic must be based on the research objective. They demonstrate that when this is done the Fornell-Larcker testing system is internally consistent and that it conforms to the rules of correspondence for relating data to abstract variables.
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