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The total effect, direct and indirect, of a variable in a path model is termed the effects coefficient. Suppose the following recursive path model:

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The variable X has a direct effect on Z, estimated by d, and an indirect effect on Z via the influence on Y, estimated by b × f, or bf. The effects coefficient of Xon Z therefore is d + bf. Effects coefficients enable the analyst to take into account indirect as well as direct effects in a CAUSAL system, arriving at a summary of the impact of a variable as it works its way through a causal system. However, if that variable is not truly exogenous, calculation of its effects coefficient can be problematic.

Michael S. Lewis-Beck
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