Determining the Number of Degrees of

Freedom

(Updated September 26, 2018)

Degrees of freedom in SEM reflect the complexity vs. parsimony of a model. We

start off with the number of known pieces of information (elements) regarding the
manifest (or measured) indicator variables included in your model. The number of
known elements is simply the number of variances and covariances
(unstandardized correlations) among the measured variables (some applications
also count the means of the measured variables). Known elements are shown in
the yellow and light-blue matrix below. From the number of known elements, we
subtract the number of freely estimated parameters (i.e., paths, correlations,
variances) in the structural equation model. Fixed parameters (e.g., a factor
loading set to 1) are not counted in determining degrees of freedom.

We can use the analogy of a bank account. The known elements are like the dollars
in your account. For each freely estimated parameter you estimate, however, you
have to "withdraw" a dollar. The degrees of freedom are thus the number of
dollars you still have in your account after withdrawing all the dollars you need to
implement the freely estimated parameters. Accordingly, the greater number of
paths you estimate, the lower the df. In a saturated (or just-identified) model, in
which all possible pathways that could be estimated are estimated, the df will be
zero. (A saturated model will fit the data perfectly, not due to any
accomplishment, but simply as a mathematical property.) As we will see, some
measures of model fit (e.g., Comparative Fit Index, Tucker-Lewis Index) take the
model's df into account.

The number of known elements in your input variance/covariance matrix (not

including means) can be determined from the following equation, where "I" is the
number of manifest indicators:
Also, in your SEM printouts, the number of freely estimated parameters can be
observed by how many parameters have significance tests (i.e., estimates, critical
ratios, and p levels). A fixed parameter will not have a significance test.

***

In counting up the number of freely estimated parameters in a model, the

distinctions between construct residual variances and construct variances, and
between indicator residual variances and indicator variances, can be confusing.
Here's a little more explanation.

Recall that anything (construct or indicator) that has an incoming unidirectional

arrow from something else in the model gets a residual variance ("bubble" or
"headphone"). In the first example in the following photo, a latent construct (large
oval) has an incoming direct arrow (shown at left) from some hypothetical
predictor variable. Let's say the predictor accounts for 45% of the variance in the
shown construct (like an R-squared in regression). The residual (unaccounted for)
variance in the bubble would thus be 55%. Because the variance accounted for (R-
squared) and unaccounted for (residual) in a dependent measure must sum to
100%, the R-squared and residual variances are redundant. If you know one is
45%, the other must be 55%, and vice-versa. There is thus no need to include both
variances in the model. By SEM convention, the variance in such a situation is
"housed" in the residual bubble (indicated by an asterisk * in the photo), which is
called a "construct residual variance."

Similar reasoning holds in the third pictured scenario. Each manifest indicator
(rectangle) has variance accounted for by the construct, as well as residual
variance. Again, each indicator's variance in this scenario is housed in the residual
bubble (see asterisks), and is known as an "indicator residual variance."

Either a construct (second example) or stand-alone indicator variable (fourth

example) may have no incoming unidirectional arrows, and only outgoing
unidirectional arrows. In these situations, lacking a residual bubble, the variance
is housed in either the construct or indicator itself.
***

For our CFA assignment on the Hendrick and Hendrick Love Attitudes Scale
(Love Styles), the photo below shows how we would determine the df. There are
two clarifications before we look at the photo:

The known elements appear in the red matrix on the right-hand side of the
photo. With 24 measured variables (six love-style constructs with four items
each in the short-form of the Love Attitudes Scale), there will be 24
variances and 276 covariances (correlations), yielding 300 known elements
or "dollars."
The freely estimated parameters appear on the left-hand side of the photo.
The way we would typically run this CFA in AMOS and Mplus, there would
be 18 freely estimated factor loadings (one loading per factor being fixed at
1) and 6 freely estimated construct variances. Alternatively, all 24 factor
loadings could be freely estimated and all 6 construct variances fixed to 1.
Either way, the domains of factor loadings and construct variances would
add up to 24 freely estimated parameters. The total number of freely
estimated parameters would also include correlations between constructs (or
factors) and indicator residuals (tiny bubbles or headphones). Ultimately,
the model has 63 freely estimated parameters (or dollar expenditures). The
df are 300-63 = 237.