The factor analysis model has been widely applied to study finance problems. The purpose of this paper is to introduce a Bayesian approach for analysing the factor analysis model. The advantages of the proposed Bayesian approach over the classical maximum likelihood rest on its capability to...

Structural equation models (SEMs) have been widely used in behavioural, educational, medical and socio-psychological research for exploring and confirming relations among observed and latent variables. In the existing SEMs, the unknown coefficients in the measurement and structural equations are...