The Decomposition of Effects in Path Analysis

Abstract

This paper is about the logic of interpreting recursive causal theories in sociology. We review the distinction between associations and effects and discuss the decomposition of effects into direct and indirect components. We then describe a general method for decomposing effects into their components by the systematic application of ordinary least squares regression. The method involves successive computation of reduced-form equations, beginning with an equation containing only exogenous variables, then computing equations which add intervening variables in sequence from cause to effect. This generates all the information required to decompose effects into their various direct and indirect parts. This method is a substitute for the often more cumbersome computation of indirect effects from the structural coefficients (direct effects) of the causal model Finally, we present a way of summarizing this information in tabular form and illustrate the procedures using an empirical example.