An EM algorithm for fitting two-level structural equation models

Maximum likelihood is an important approach to analysis of two-level structural equation models. Different algorithms for this purpose have been available in the literature. In this paper, we present a new formulation of two-level structural equation models and develop an EM algorithm for fitting this formulation. This new formulation covers a variety of two-level structural equation models. As a result,the proposed EM algorithm is widely applicable in practice. A practical example illustrates the performance of the EM algorithm and the maximum likelihood statistic.