I am new to the methodology of SEM, and though I do have a basic understanding of regression and factor analysis, I have not come to grips with one question:
Instead of adding a measurement model to the system of regression equations that contains one or more latent independent variables, could I instead feed the measurement items to the regression equations directly?
Technically I might, of course, but there must be a reason why this is not seen as appropriate. In what sense can the larger system of regression cum measurement equations perform better than a smaller system of regression equations including the measurement items as additional regressors?
To me it seems an (maybe too?) obvious question to pose, but in my (admittedly superficial) glances at SEM monographs (Bollen, Brown) I haven't found that covered. If somebody could give a bit of intuition or hint at helpful literature that would be much appreciated.
Kind regards, Thorsten