Testing Model Fit in Path Models with Dependent Errors Given Non-Normality, Non-Linearity and Hierarchical Data

We provide a generic method of testing path models that include dependent errors, nonlinear functional relationships and using nonnormal, hierarchically structured data. First, we provide a decomposition of the causal model into smaller, independent sets. These sets can be modeled independently of each other with methods that respect the type of data in these sets. Second, we introduce copulas to model the dependent errors between non-normally distributed variables. Our method yields identical results as classical covariance-based path modelling when meeting its assumptions of linearity and normality, outperforms classical SEM given nonlinear functional relationships, and can easily accommodate any parametric probability function and nonlinear functional relationships.