On measures of explained variance in nonrecursive structural equation models

Whereas measures of explained variance in a regression and an equation of a recursive structural equation model can be simply summarized by a standard R-2 measure, this is not possible in nonrecursive models in which there are reciprocal interdependencies among variables. This article provides a general approach to defining variance explained in latent dependent variables of nonrecursive linear structural equation models. A new method of its estimation, easily implemented in EQS or LISREL and available in EQS 6, is described and illustrated.