say the reliability of the scores for X1 and X2 are both .70. Figure 7 contains a path diagram of the regression model with these imperfectly-measured variables. Note the addition of the error and true score components for X1 and X2. In addition, while the
correlation and regression coefficients are the same as those from Example 1,the residual variance has increased from 0.685 to 0.816 because the R2 decreased after modeling their unreliability.