Structural Equations Models

Multivariate Solutions

Basics of Structural Equation Models

Structural equation modeling (SEM) is a statistical technique for building and testing statistical models, which are often causal models. It is a hybrid technique that encompasses aspects of confirmatory factor analysis, path analysis and regression, which can be seen as special cases of SEM. Among its strengths is the ability to model constructs as latent variables variables which are not measured directly, but are estimated in the model from measured variables which are assumed to 'tap into' the latent variables.
For example, a latent variable can be Overall Satisfaction, which is a composite of, say, three satisfaction variables.

SEM is an extension of the general linear model that simultaneously estimates relationships between multiple independent, dependent and latent variables.

Basics of Structural Equation Models

Structural equation modeling (SEM) is a statistical technique for building and testing statistical models, which are often causal models. It is a hybrid technique that encompasses aspects of confirmatory factor analysis, path analysis and regression, which can be seen as special cases of SEM. Among its strengths is the ability to model constructs as latent variables variables which are not measured directly, but are estimated in the model from measured variables which are assumed to 'tap into' the latent variables.
For example, a latent variable can be Overall Satisfaction, which is a composite of, say, three satisfaction variables, such as Purchase Intent, Likelihood to Purchase, and Likelihood to Recommend.

SEM is an extension of the general linear model that simultaneously estimates relationships between multiple independent, dependent and latent variables.

Hypothetical Model Of Customer Satisfaction

Quality Attributes
Timely response to service request Service initiated as scheduled Available/accessible when needed Timely response to requests Services performed as scheduled Professionalism of CSR Courtesy of CSR

Quality Components Service Initiation and Transfer

Overall Satisfaction

Performance

Customer Service

Likelihood of Ongoing Selection of Company

Timely meter reading Accurate meter reading Accurate meter estimates Prompt response to outage Power restored quickly after outage Emergency addressed quickly Bill layout Ease of understanding bill Timely arrival of bill each month Time from bill issuance to payment Services such as levelized billing

Meter Services Emergency Response / Outage Billing

Overall Satisfaction With Company

Company/Brand Image

Choice of payment options Flexibility of due date (Pick-a-Date) Courtesy calls before power cut off Timely inspections Timely issuance of permits

Payment

Recommend Company

Technical Services