Opportunities for Improving Consumer Research through Latent Variable Structural Equation Modeling

This article discusses several advantages of latent variable structural equation modeling (LVSEM), and the potential it has for solving some fundamental problems hindering research in the field. The advantages highlighted include the ability to control for measurement error; an enhanced ability to test the effects of experimental manipulations; the ability to test complex theoretical structures; the ability to link micro and macro perspectives; and more powerful ways to assess measure reliability and validity. My hope is to sensitize researchers to some of the key limitations of currently used alternative methodologies, and demonstrate how LVSEM can help to improve theory testing and development in our discipline. Copyright 2001 by the University of Chicago.