While conducting SEM analysis, if in the model there exists one variable which is a moderator and that is nested, would this necessarily require multilevel analysis? Are there any strategies/possibilities to opt out of the multi level analysis (to not deal with certain statistical complications)? Any citations would be helpful. Thanks in advance!
I'm not sure what you mean by a "moderator that is nested." Data structures can be nested (e.g., 2 levels), and there can be moderator variables at Level 1, Level 2, or both. For example, in a 2-level data structure with children (Level 1) who are nested with classrooms (Level 2), the class climate may act as a Level-2 moderator variable. It would be difficult to examine such a moderating effect without conducting multilevel regression analysis. Without multilevel modeling, the nested data structure (and the dependencies that arise from nesting) would not be properly addressed.
I would think if you had a nested moderator variable then the outcome/ response would have to be nested too and that would require a multilevel analysis. I may not be understanding your set up of the problem.