Slide B.1 LISREL MathematicalMarketing Appendix B: The LISREL Software In this section we will cover how to run LISREL, software designed to run the covariance structure models featured in Chapters 9 and 10, and also 11. Note that LISREL is one of many computer programs available to run these sorts of models. In addition, there is  SAS PROC CALIS  AMOS  LISCOMP  EQS and many other lesser known programs. I am going to cover the method of LISREL commands that is consistent with the matrix approach of this chapter. This means creating "LISREL Project" statements. Other approaches are available with the program.

Slide B.2 LISREL MathematicalMarketing Example from Johnson and Wichern p. 380 This example utilizes the difference in daily stock prices for five stocks picked from two industrial sectors. We hypothesize that the overall health of the two sectors is causally antecedent to the stock prices of the observed stock prices.

Slide B.3 LISREL MathematicalMarketing Path Diagram of Johnson and Wichern Data Allied Chemicals DupontCarbide Petroleum ExxonTexaco

Slide B.4 LISREL MathematicalMarketing Example from Johnson and Wichern p. 380 DA NO=100 NI=5 LA Allied Dupont Carbide Exxon Texaco MO NY=5 NE=2 PS=SY,FR KM FR LY(2,1) LY(3,1) LY(5,2) PS(2,1) MA LY MA PS ST 1 TE(1) - TE(5) OU NS AL Title Statement Describes the DAta Describes the MOdel Input Matrix FRee certain elements Start values for y Start values for  Start values for   OUtput parameters LAbels the variables LISREL Program Statements

Slide B.5 LISREL MathematicalMarketing An Overview of Control Statements First statement is the title DAta parameters NO Number of observations NI Number of variables MA Matrix to be analyzed (= KM, CM, MM) xx n.nn n.nn n.nn n.nn … … … LA first-var-name second-var-name ···

Slide B.6 LISREL MathematicalMarketing The MOdel Parameters Statement MOdel parameters NY Number of Y variables NX Number of X variables NE Number of Eta variables NK Number of Ksi variables (All of these default to 0) ma = FU SY DI ZE ID, FI FR ma can be any of the 8 LISREL parameter matrices: LY, TE, LX, TD, GA, BE, PH, PS

Slide B.7 LISREL MathematicalMarketing Creating Start Values ST x.xx ma(m 1, n 1 ) ma(m 2, n 2 ) ma can be LY, TE, LX, TD, GA, BE, PH or PS ma x x ··· x ··· ··· x x ··· x Specify a particular value for various elements Specify a whole matrix filled with values

Slide B.8 LISREL MathematicalMarketing Fixing or Freeing Indivual Elements Priority Sequence: 1.Specification on a FI or FR statement 2.Specification in the MO statement 3.Default for that matrix FI ma(m 1, n 1 ) ma(m 2, n 2 ) FR ma(m 1, n 1 ) ma(m 2, n 2 )

Slide B.9 LISREL MathematicalMarketing The OUtput Parameters Statement OU TV MI NS

Slide B.10 LISREL MathematicalMarketing Special Cases y =  y  +  x =  x  +   = B  +  +   A confirmatory factor model with all y's  A confirmatory factor model with all x's  A structural equation model with all variables observed  A stuctural equation model with all y's V(  ) =   V(  ) =  V(  ) =  V(  ) =  