Application of Structural Equation Modeling (SEM) in restructuring state intervention strategies toward paddy production development

Abstract

To structure state interventions policies into rice production development in Iran; by studying state intervention policies in major rice producing countries; a theoretical model was proposed. To test the fitness of the model by real data from the field, and to evaluate state intervention policies, CFA and SEM application have used. Convergent Validity (CV), Discriminate Validity (SD) and Construct Reliability (CR) of the model were assessed by applying appropriate tests and measurement indices, including SIC and AVE. Despite little is known about the Multicollinearity (MC) in SEM; extra care was taken; proper diagnosis and treatment for MC in SEM was practiced. The outcome is totally new structure for intervention policies, can be taken by state to boost rice production in Iran. The same procedure can be applied into agricultural development of other states.