Course Syllabus

Political Economy 6318 and Economics 6314:

STRUCTURAL EQUATION & MULTILEVEL (HIERARCHICAL) MODELING
Spring 2008

Professor Contact Information

Professor: Kurt Beron GR 3.208, (972) 883-2929, kberon@utdallas.edu.

Office Hours: Tuesdays 9 – 9:55am and Wednesday 2:50 – 3:50 and by appointment.

TA: Monica Brussolo GR 2.512 phone: 972-883-4916, monica.brussolo@utdallas.edu

Office Hours: Tuesdays 11:30 – 12:30 and Thursdays 9 – 9:55am, and by appointment.
NOTE, Monica is available for this course only for help with basic computer lab support
such as logging into the lab machines and using Stata. She is not available for the
specialized software or for the substantive issues within this course.

Home Page for Course is on WebCT: http://webct.utdallas.edu

Required Textbooks and Reading.

Bollen, Kenneth (1989). Structural Equations with Latent Variables. Wiley.

Luke, Douglas (2004). Multilevel Modeling, Sage Publications.

The following books will have material assigned at times during the semester but
they are available either for free on-line through the UTD library or, for the AMOS
and HLM software, downloadable from the course web site.

Hox, Joop (2002). Multilevel Analysis: Techniques and Applications. Erlbaum Press.
(Note, the first two chapters are on the course web site as well)

Byrne, Barbara, (2001) Structural Equation Modeling With Amos: Basic Concepts,
Applications, and Programming, Erlbaum Press. Only one chapter will be assigned from
this book but it may be useful as an AMOS reference.

AMOS 16.0 (or 7.0) software manual. This manual is downloadable from the class web
site. Also, the HLM student version has an on-line manual and is available on our web
site (see below). The full HLM manual is available at the library on reserve.

In addition to the above books and software manuals, I assume you have your regression-
based (statistics/econometrics) textbook from your prerequisite class (or can get one from
the library). I will assign chapters and pages from Gujarati’s Basic Econometrics
textbook (4th ed) that has been used in POEC 5316 recently. This book is also on library
reserve. Other econometrics books, however, can be used equally well and I have put the
contents from Gujarati on the web site for you to use for comparison. There will also be
articles required to be read during the semester.

Introduction.

Structural equation and multilevel (hierarchical) models include classes of models that
are widely used in the social and behavioral sciences, management, and a variety of other
disciplines. Structural equation models (SEM) include standard regression models that
involve variables assumed measured without error (including simultaneous equation
models), and models allowing for measurement error including the confirmatory factor
model and the linear structural equation model (often called Lisrel, or covariance,
models). In this class we will look at these models developing them from those most
familiar (regression) to those less likely to have been encountered (latent variable
models). We will combine theory with application and will follow-up all models
discussed with computer examples.

Multilevel models are known by a variety of names including random coefficient, HLM
(hierarchical linear models), mixed, and error component models. Unlike the structural
equation models that have random variables, these models have random coefficients.
These models are often used to take into account the clustering of data either within
cross-sections or within panels. Thus they are used in a wide array of organizational and
longitudinal research. We will examine the basic two-level model and apply it in both of
these settings and, as with the structural equation portion of the course, will combine
theory with application.

Prerequisites. The prerequisite for this course is experience with regression models, at
the level of POEC 5316 or ECO 5311 or an undergraduate econometrics class. Coming
in I assume you have primarily an algebra-based understanding of regression. The matrix
approach in, for example, POEC 5316 is usually not required and so I’ll review this with
you and you should expect to get up to speed with basic matrix approaches quickly. I
know there are a variety of backgrounds in this course and will try to accommodate this
as much as possible. More will be said about this in class.

I expect you to know a general computer package coming into this course, for example
Stata, SAS, or SPSS. Basic data management tasks will be required for which there will
be limited in-class support.

Computer Usage. The primary computer package we will use for structural equation
modeling is AMOS. This is one of many available SEM packages and is currently
distributed by SPSS. The student version is available on our web site.

Confusingly the current release of AMOS is version 16, the previous version for which a
lot is written is version 7, the student version is 5, and the Byrne book refers to version 4.
Go figure. However I’ll try and straighten this out for you in class.
I have chosen AMOS almost exclusively because of its graphical interface. It is
relatively easy to use. However this is both good and bad. It will be (relatively) easy to
get up and running with it unlike some other packages. However there is a greater “black
box” feel to it in that you don’t always know what’s going on behind the scene. Don’t
worry. Much of this background is what you’ll be learning in class. I will contrast
AMOS at times with one of its competitors, LISREL. In addition, AMOS does have a
batch, programming mode that you may choose to use. However this option will not be
supported in this class.

The primary computer package we will use for multilevel modeling is HLM distributed
by Scientific Software. This is basically a point-and-click package for the analysis and
the student version of it is available and may be downloaded from our web site. Again,
there are a variety of competitors to HLM, but in the U.S. this is, for now at least, the
most popular program. However a major competitor in its newest release is Stata and I
will compare the two at times.

Both AMOS and HLM require that your data be prepared outside of their programs. You
will have to use your knowledge of another statistical program to prepare your data for
specialized analysis. However in both cases even Excel is generally satisfactory – and
sometimes better – than a pure stat program. However I will feel free to ask you to use
some other package (of your choice) for comparison. For example, I may ask you to run
a basic multiple regression in the stat package of your choice and compare it to AMOS’s
output.

All the software for this course is available in the Green Computer Lab (GR 3.206). I
encourage you to take advantage of the free download of student versions of AMOS and
HLM that are available as listed above. They are generally the same as the production
version, but limited to fewer variables. Many, but not all, of the examples I’m
anticipating for the course should generally work fine with them, though not necessarily
the ones you will do for your presentation (see below).

E-mail: Questions may be sent to me by e-mail throughout the semester. I will answer
them within two to three days, though usually sooner. For many students this will be the
easiest way to get timely answers to questions. Additionally, whenever clarifications
need to be made in material I will use e-mail to distribute the information, so you should
also check your e-mail periodically. A couple of important rules relating to e-mail in this
course:
• If you want me to read your e-mail, it must include either POEC 6318 or ECO
6314 in the subject header. Otherwise it may well end up as automatically deleted
spam.
• The University requires all official e-mail to go to your UTD address. Therefore I
will send most messages using your WebCT address. You may want to have e-
mail then forwarded to some other address, which you can set up within WebCT.
You must have a Campus id and password if you plan on using the computers in GR 3.206.
Assignments and Grading.

(1) Problem Sets: There will be three problem sets during the semester and each will be
due two weeks after being given. They will consist of exercises in which students analyze
data using statistical analysis software as well as solve problems by hand. You may work
together on problem sets, but all work turned in must be written up individually and close
copies of someone else’s problem set will be penalized. Be warned, I want all text (as
opposed to equations and graphs that may or may not be) to be typed.

(2) Written Critique and Presentation: Most of you will be paired up into teams of two
for this part. You will have a choice of

(a) either replicating a published article that contains an analysis with some type of latent
variable model (e.g., a confirmatory factor analysis, a measurement model, a structural
equation model) and then conducting a detailed critique or

(b) writing a paper in which your team describes an application of structural equation
modeling that is typical of research in one of your areas. The goal of the write-up is to
provide full information regarding an actual application of structural equation modeling
to a set of data of your choosing. (Note: Pursuing this option requires that you have a
suitable set of data.)

In both cases reports are to include the following:

a brief statement of the research question and hypotheses,

a detailed method section,
a detailed results section,
a brief conclusion section.

Note that I am expecting you to do this based on the structural equations part of the
course and not the multilevel part due to how the course has been scheduled with SEM
first. For those planning on replicating an article, I must approve the article chosen and
only one group may choose any given article and. The date when this paper must be
chosen by is given in the class schedule and I must either be given a hardcopy of the
paper or sent an electronic version by e-mail. I encourage you to look early for possible
papers and/or ideas and let me know what you’re considering early on in case I reject it.
Papers and ideas may be disapproved either because of inappropriateness for this course--
too simple, too complex, or too little information in the article--or because of apparent
reporting problems in the paper.

You will write a joint paper of about ten pages, excluding PowerPoint slides. If you are
replicating the results in an article you will: attempt to reproduce the analysis undertaken
in the article; explain why a particular approach was chosen; look at weaknesses and
limitations of the analysis; and will suggest and evaluate alternatives to the published
analysis.1 The article must contain enough information to be reproducible by you with
1
This idea is based on one from Edward Rigdon.
AMOS as you are to replicate the results, or at least some set of the results agreed to with
me. You may not choose an article that has the computer code available.

Using a PowerPoint presentation, you will present either your replication or your original
research during the timeslot your group is assigned. Do not just read the paper you
have written. Your presentation should be timed to be no more than 20 minutes. You
will distribute to all students a handout with your PowerPoint slides on the day of your
presentation.

You must create a CD that has (a) a copy of the article if you are replicating the article
(assuming it is available electronically – otherwise you need to include a copy of it for
me), (b) a copy of the PowerPoint presentation, (c) a copy of your paper, and (d) a folder
that includes the data you used, your program, and a log with your output in it. You will
not receive these back, so make sure you make yourself a copy.

You should read and consider in your presentation the following two articles:

Boomsma, A. 2000. “Reporting Analyses of Covariance Structures.” Structural

Equation Modeling, 7(3), 461-483.

McDonald, R.P. and Ho, M.R. 2002. “Principles and Practice in Reporting
Structural Analyses.” Psychological Methods, 7, 64-82.

Within the paper that you write you must state in a paragraph several specific ways in
which you used these papers, relating the ways back to specific points within the articles.

Grading: Course grades will be determined by the homework (60 percent), the critique
and presentation of your analysis graded with a letter grade (35 percent), and a 5%
“fudge” factor based on factors including constructive participation in class, particularly
when called upon. A missed assignment will only be excused if medical, or other
suitable, documentation is presented in writing. No incompletes will be given for this
class except under extraordinary conditions such as long-term hospitalization.

A word of warning: Do not wait until the last minute to work on your
critique/presentation as it will usually be harder than you think and there is a problem set
given over the same period that you’ll be presenting.
 Structural Equation and Multilevel Modeling Tentative Course Schedule
Spring 2008 - Beron

The dates below are suggestive. Required reading is listed for when it is supposed to
have been read. I also assume you have reviewed the Gujarati (or similar econometric
textbook) readings. I am not assuming you’ve gone through Gujartati in detail but are
using it more of a reference. In addition there will be other readings assigned. Problem
set and the presentation dates are listed below, and they will not change.

January
9 Introduction and Basic Regression Review
Bollen (pp. 4 - 9); Gujarati (chapter 3)

16 Statistical Concepts, Matrix Algebra, Regression Analysis, and Path Analysis

Bollen (pp. 1-4, 21-39, 123-126 and 449-458). With Bollen, ignore references to
sections outside the readings given.
Gujarati (5.5-5.7, 6.2-6.3, Appendices B.1-B3, B.6, C.1-C.3)

23 Meet in Green Computer Lab, GR 3.206.

You must have a Campus id and password if you plan on using the computers in GR
3.206 (see above).

The focus of this class will be finishing up the previous class material and
introducing some of the software for the course in the lab. In the course of this
we will go through the

AMOS Manual (chapter 3 and Examples 1 – 4 and Example 14)

I recommend that you try the tutorial beforehand – chapter 3 – which will run on
the student version. You do not need to have tried the other AMOS programs, but
you should look over the chapters as we will work through them together in class
and familiarity will be helpful.

If time permits, we will begin:

Simultaneous Equations Models with Observed Variables

Bollen (pp. 80-104, and 126-130); Gujarati (chapter 18, 19.1-19.3)

– Presentation groups assigned

30 Continued and AMOS Manual Example 7 and

Wenglinsky, H. 1997. “How Money Matters: The Effect of School District

Spending on Academic Achievement.” Sociology of Education, 70(3), 221-237.
(Don’t worry about Table 4 and the nested model tests – yet)
– Problem Set 1 Given
February

6 Continued and Measurement Error and Confirmatory Factor Analysis

Bollen (pp. 151-159 and 226-254); Gujarati (13.5); AMOS Manual Example 8

13 Continued and Estimating Structural Equation Models, Data Model Fit and Model
Modification
Bollen (pp. 67-72, 104-123 and 256-292); Gujarati (8.3-8.8; 13.7); and

Hu, L. and Bentler, P.M.. 1995. “Evaluating Model Fit.” In Structural

Equation Modeling, ed. R. Hoyle; and

Byrne (Chapter 3 – Application 1)

[For a slightly more recent, but slightly more technical, discussion of fit indices:
Hu, L. and Bentler, P.M.. 1999. “Cutoff Criteria for Fit Indexes in Covariance
Structure Analysis: Conventional Criteria Versus new Alternatives” Structural
Equation Modeling, 6(1), 1-55.]

– Problem Set 1 Due

– Presentation groups turn in proposed article for instructor consideration

20 Continued and General Structural Equation Modeling

Bollen (pp. 10-20 and 319-338);

[Economics-oriented students may want to review:

Goldberger, A. 1972. “Structural Equation Methods in the Social Sciences.”
Econometrica, 40(6), 979-1001.]

27 Continued
AMOS Manual Examples 5 and 6

March

5 Continued and several papers will be assigned to students for their leading of a
discussion with the class

– Problem Set 2 Given

12 Spring Break

19 Continued and transition to multilevel modeling – cross-sectional approach

Hox, J. 2002. Multilevel Analysis. Chapters 1 and 2 (in pdf format); Luke (pp.
1 – 23); Gujarati (Chapter 16).
26 Meet in Green Computer Lab, GR 3.206

Luke (pp. 23 – 53);

HLM software – open the “Contents” tab within “Help” and look over the
“Getting started with HLM” within “Getting Started.” You shouldn’t worry
too much about all the details, but just get a sense of it. Then, look over the
“Two-level (HLM) examples” within the “Annotated examples” tab.

– Problem Set 2 Due

April

2 Continued from before and

Garner, C.L., & Raudenbush, S.W. (1991). Neighborhood effects on

educational attainment: A multilevel analysis. Sociology of Education, 64,
251-262.

9 Longitudinal Analysis

Luke (pp. 62 – 72); and Hox (Chapter 5); and

Seltzer, M., Choi, K., & Thum, Y.M. (2003). Examining relationships
between where students start and how rapidly they progress: Using new
developments in growth modeling to gain insight into the distribution of
achievement within schools. Educational Evaluation and Policy Analysis, 25,
263-286

– Problem Set 3 Given

16 Presentations

23 Presentations (continued if needed)

Latent Growth Curve Analysis
Hox (Chapter 14)

– Problem Set 3 Due