Use of structural equation modeling in human development research

In social sciences, it is common to hypothesize that latent factors (e.g., psychological well-being) underlie the observed variables (e.g., depression and risk behavior). Hence, it is important to examine the nature of latent variables, the inter-relationships among such variables, and their associations with other predictors and outcome variables. These latent variable-related issues can be well addressed by adopting the approach of structural equation modeling. Apart from describing the use of structural equation modeling in research on human development, this paper also presents the assumptions underlying structural equation modeling, steps of model construction and model assessment, and both the strengths and limitations of this method in human development research. Finally, some examples using structural equation modeling in the Chinese contexts are also illustrated.