On path coefficients in fully recursive systems

This paper explores certain relationships among path coefficients for fully recursive systems. A new decomposition of the correlation coefficient between consecutive variables is obtained. This decomposition sheds light on the structure of path coefficients. A simple iterative method is introduced for estimating certain path coefficients as functions of other, more easily estimated, path coefficients. An example is included to illustrate possible simplification in the calculations.

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The Faculty of Management and Industrial Engineering, The Technion, Haifa, Israel.