ABSTRACT
In this chapter, we consider further some of the ways in which structural equation modeling (SEM) methods can be integrated with multilevel regression to investigate a wide variety of models containing hierarchical data structures, focusing in particular on incorporating measurement error in defining constructs through their observed indicators. We first develop a single-level model with two latent factors. We then extend this model to consider the nesting of individuals within departments. Finally, we extend this model to consider the nesting of departments within organizations. This overview of models with latent variables foreshadows our further development of these issues and models in subsequent chapters.
