I have is a small dataset of 150 observations (villages) and quite a complex model with 6 variables and 13 paths. This results in 23 parameter estimates (q) (including coefficients, constants and variances) from our SEM, which means we have about 6 observations per parameter. This is a lot less than the recommended N:q ratio of 20 observations per parameter recommended by Kline (2015).
Furthermore, ideally we would be controlling for some potential confounders in most of the pathways, so this reduces the N:q ratio even further. When I do this (i.e. run the SEM with extra covariates), the model shows some pathways being highly significant. When I re-run the model without the covariates, these are no longer significant.
I am not sure which of these outputs is more reliable - on the one hand, the N:q ratio in the model with all controls is tiny, so the significant parameters may be completely unreliable. However, inclusion of the covariates may be improving the model by removing/absorbing variance.
Can anyone advise on how I might choose between models?
Thanks in advance!!