Model selection in covariance structures analysis and the "problem" of sample size: a clarification

Complex models for covariance matrices are structures that specify many parameters, whereas simple models require only a few. When a set of models of differing complexity is evaluated by means of some goodness of fit indices, structures with many parameters are more likely to be selected when the number of observations is large, regardless of other utility considerations. This is known as the sample size problem in model selection decisions. This article argues that this influence of sample size is not necessarily undesirable. The rationale behind this point of view is described in terms of the relationships among the population covariance matrix and 2 model-based estimates of it. The implications of these relationships for practical use are discussed.