Assumptions and Comparative Strengths of the Two-Step Approach

Fornell and Yi (1992 this issue) have discussed four assumptions that they contend underlie two-step approaches to structural equation modeling. Each of these assumptions is demonstrated to not be an assumption of the two-step approach recommended by Anderson and Gerbing (1988). In doing so, an attempt is made to provide some clarification and guidance to researchers interested in employing structural equation modeling to test and develop theory. Given the comparative strengths of the two-step approach over a one-step approach in practice, it is concluded that the preferred approach to the modeling task is the two-step approach of Anderson and Gerbing (1988).