I am using path analysis to test hypotheses in my study. I have been told by a few people in passing that I can use manifest variables rather than latent variables as long as my reliabilities are high.
The Cronbach's alpha reliabilities of my constructs are 0.81, 0.88, 0.87, 0.90 and 0.92.
I know in general, above 0.7 is considered acceptable reliability for scales, but I don't know if that's different for path analysis.
Coffman and MacCallum (2005) write that low reliabilities bias the parameter estimates, and that those parameters will in general be lower than if reliabilities were perfect. However, they didn't provide a cut-off... I.e. what level of reliability is generally deemed acceptable before necessitating the use of latent variables? Should I assume that 0.7 is the cutoff? And if so, is there a reference I can cite for this that specifically relates to path analysis?
Thank you in advance.
EDIT: In my analyses I have used manifest variables. What I really want to know is whether I am justified in using manifest variables, or whether it's necessary for me to use latent variables.