In chapter 9 we presented the basic framework for the development of structural equation models. We focused on the measurement model, the structural model, and the different variance-covariance terms. These constitute the basic building blocks for analyzing and interpreting a structural equation model. In this chapter we extend our discussion of the development of structural equation models. We present a hypothesized theoretical structural equation model and discuss issues related to model specication, model identication, model estimation, model testing, and model modication in the context of that example.