Abstract
This chapter presents the structural equations for directly observed variables. The analytical approach is very similar to path analysis, described in Chapter 3. In LISREL modeling of structural equations with observed variables, path analysis can be further specified with the recursive model (X affects Y only) and the non-recursive model (Y1 affects Y2 and Y2 also affects Y1). For example, if one examines the relationship between inpatient care (Y1) and outpatient care (Y2) services used by patients, an investigator can assume that a reciprocal relationship exists between these two types of service use (i.e. that an increase in inpatient care will be associated with an increase in outpatient care, and vice versa).
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