A simplistic model suggesting that intelligence (as calculated by four concerns) can anticipate educational performance (as measured by SAT, ACT, and highschool GPA) is shown above (top right). In SEM diagrams, latent variables are commonly shown as ovals and observed variables as rectangles. The diagram above shows just how error (age) influences each cleverness concern as well as the SAT, ACT, and GPA scores, but will not influence the latent factors. SEM provides numerical estimates for each of this parameters (arrows) into the model to point the strength of the relationships. Therefore, along with testing the overall theory, SEM therefore permits the researcher to identify which observed variables are good indicators for the latent variables.
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