I want to emphasize that the path diagram is not just a pretty picture; it is a powerful computational device because the rule for computing correlations (the bridge from rung two to rung one) involves tracing the paths that connect two variables to each other and multiplying the coefficients encountered along the way. Also, notice that the omitted arrows actually convey more significant assumptions than those that are present. An omitted arrow restricts the causal effect to zero, while a present arrow remains totally agnostic about the magnitude of the effect (unless we a priori impose some
...more
