Modeling Nonlinear Structural Equation Models: A Comparison of the Two-Stage Generalized Additive Models and the Finite Mixture Structural Equation Model

Researchers have devoted some time and effort to developing methods for fitting nonlinear relationships among latent variables. In particular, most of these have focused on correctly modeling interactions between 2 exogenous latent variables, and quadratic relationships between exogenous and endogenous variables. All of these approaches require prespecification of the nonlinearity by the researcher, and are limited to fairly simple nonlinear relationships. Other work has been done using mixture structural equation models (SEMM) in an attempt to fit more complex nonlinear relationships. This study expands on this earlier work by introducing the 2-stage generalized additive model (2SGAM) approach for fitting regression splines in the context of structural equation models. The model is first described and then investigated through the use of simulated data, in which it was compared with the SEMM approach. Results demonstrate that the 2SGAM is an effective tool for fitting a variety of nonlinear relationships between latent variables, and can be easily and accurately extended to models including multiple latent variables. Implications of these results are discussed.