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6 - Piecewise SEM with Implicit Latent Variables

Published online by Cambridge University Press:  18 July 2026

Bill Shipley
Affiliation:
Université de Sherbrooke, Canada
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Summary

A variable that is part of a hypothesized causal graph but for which no observations are available is called a ‘latent’ variable. If this latent variable is part of the resulting structural equations, then it is ‘explicit’. If it is not part of the structural equations, then it is ‘implicit’. This chapter explains how one can convert a DAG with explicit latent variables into an equivalent causal graph (a mixed acyclic graph (MAG)) that does not include the latent variables. The notion of ‘m-separation’ in a MAG is a generalization of ‘d-separation’ of a DAG. One can generalize the dsep test to include MAGs, and this generalization is included in the pwSEM package.

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