, Volume 65, Issue 4, pp 457-474

First online:

Maximum likelihood estimation of latent interaction effects with the LMS method

  • Andreas KleinAffiliated withJohann Wolfgang Goethe-University Email author 
  • , Helfried MoosbruggerAffiliated withJohann Wolfgang Goethe-University

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In the context of structural equation modeling, a general interaction model with multiple latent interaction effects is introduced. A stochastic analysis represents the nonnormal distribution of the joint indicator vector as a finite mixture of normal distributions. The Latent Moderated Structural Equations (LMS) approach is a new method developed for the analysis of the general interaction model that utilizes the mixture distribution and provides a ML estimation of model parameters by adapting the EM algorithm. The finite sample properties and the robustness of LMS are discussed. Finally, the applicability of the new method is illustrated by an empirical example.

Key words

latent interaction effects mixture distribution ML estimation structural equation modeling (SEM) EM algorithm