Factorization of the Partial Covariance in Singly-Connected Path Diagrams

Jose Peña

Keywords: Path analysis, structural equation models, Simpson's paradox

TL;DR: We extend path analysis by showing that, for a singly-connected path diagram, the partial covariance of two random variables factorizes over the nodes and edges in the path between the variables.

Abstract: We extend path analysis by showing that, for a singly-connected path diagram, the partial covariance of two random variables factorizes over the nodes and edges in the path between the variables. This result allows us to determine the contribution of each node and edge to the partial covariance. It also allows us to show that Simpson's paradox cannot occur in singly-connected path diagrams.