I am a PhD student in the field of economics. As part of my research work I am setting a SEM model. I have designed two models that present acceptable goodness-of-fit statistics respectively. Nevertheless, I’ve got doubts about which one would be my best choice. Model 1 would be my preferred option as it incorporates more observable variables than Model 2. However the fit statistics of Model 1 seem “poorer” than those of Model 2. For instance, the p-value of the Chi-Square of Model 1 is 0.001 < 0.05.
Do you think that the fit statistics of Model 1 are acceptable, or should I clearly incline my decision for Model 2?
The SEM graphs and fit results are as follows: