Direct and Indirect Effects in Linear Structural Equation Models

This article discusses total indirect effects in linear structural equation models. First, I define these effects. Second, I show how the delta method may be used to obtain the standard errors of the sample estimates of these effects and test hypotheses about the magnitudes of the indirect effects. To keep matters simple, I focus throughout on a particularly simple linear structural equation system; for a treatment of the general case, see Sobel (1986). To illustrate the ideas and results, a detailed example is presented.