Case based error variance corrected estimation of structural models

Abstract: A new method for estimating structural equation models (SEM) is proposed and evaluated. In contrast to most other methods, it is based directly on the data, not on the covariance matrix of the data. The new approach is flexible enough to handle non-linear and non-smooth models and allows to model various constraints. Principle strengths and weaknesses of this approach are discussed and simulation studies are performed to reveal problems and potentials of this approach.