Path Analysis -- What it Is and How to Use It

Path Analysis What it Is and How to Use It Path analysis is a form of multiple regression statistical analysis that is used to evaluate causal models by examining the relationships between a dependent variable and two or more independent variables. By using this method, one can estimate both the magnitude and significance of causal connections between variables. Key Takeaways: Path Analysis By conducting a path analysis, researchers can better understand the causal relationships between different variables.To begin, researchers draw a diagram that serves as a visual representation of the relationship between variables.Next, researchers use a statistical software program (such as SPSS or STATA) to compare their predictions to the actual relationship between the variables. Overview Path analysis is theoretically useful because, unlike other techniques, it forces us to specify relationships among all of the independent variables. This results in a model showing causal mechanisms through which independent variables produce both direct and indirect effects on a dependent variable. Path analysis was developed by Sewall Wright, a geneticist, in 1918. Over time the method has been adopted in other physical sciences and social sciences, including sociology. Today one can conduct path analysis with statistical programs including SPSS and STATA, among others. The method is also known as  causal modeling, analysis of covariance structures, and latent variable models. Prerequisites for Conducting a Path Analysis There are two main requirements for path analysis: All causal relationships between variables must go in one direction only (you cannot have a pair of variables that cause each other)The variables must have a clear time-ordering since one variable cannot be said to cause another unless it precedes it in time. How to Use Path Analysis Typically path analysis involves the construction of a path diagram in which the relationships between all variables and the causal direction between them are specifically laid out. When conducting a path analysis, one might first construct an input path diagram, which illustrates the hypothesized relationships. In a path diagram, researchers use arrows to show how different variables relate to each other. An arrow pointing from, say, Variable A to Variable B, shows that Variable A is hypothesized to influence Variable B. After the statistical analysis has been completed, a researcher would then construct an output path diagram, which illustrates the relationships as they actually exist, according to the analysis conducted. If the researcher’s hypothesis is correct, the input path diagram and output path diagram will show the same relationships between variables. Examples of Path Analysis in Research Lets consider an example in which path analysis might be useful. Say you hypothesize that age has a direct effect on job satisfaction, and you hypothesize that it has a positive effect, such that the older one is, the more satisfied one will be with their job. A good researcher will realize that there are certainly other independent variables that also influence our dependent variable of job satisfaction: for example, autonomy and income, among others. Using path analysis, a researcher can create a diagram that charts the relationships between the variables. The diagram would show a link between age and autonomy (because typically the older one is, the greater degree of autonomy they will have), and between age and income (again, there tends to be a positive relationship between the two). Then, the diagram should also show the relationships between these two sets of variables and the dependent variable: job satisfaction. After using a statistical program to evaluate these relationships, one can then redraw the diagram to indicate the magnitude and significance of the relationships. For example, the researcher might find that both autonomy and income are related to job satisfaction, that one of these two variables has a much stronger link to job satisfaction than the other, or that neither variable has a significant link to job satisfaction. Strengths and Limitations of Path Analysis While path analysis is useful for evaluating causal hypotheses, this method cannot determine the  direction  of causality. It clarifies correlation and indicates the strength of a causal hypothesis, but does not prove direction of causation. In order to fully understand the direction of causality, researchers can consider conducting experimental studies in which participants are randomly assigned to a treatment and control group. Additional Resources Students wishing to learn more about path analysis and how to conduct it can refer to  the University of Exeter’s overview of Path Analysis and  Quantitative Data Analysis for Social Scientists  by Bryman and Cramer. Updated by Nicki Lisa Cole, Ph.D.