Latent Variable Bayesian Networks Constructed using Structural Equation Modelling

Bayesian networks in fusion systems often contain latent variables. They play an important role in fusion systems as they provide context which lead to better choices of data sources to fuse. Latent variables in Bayesian networks are mostly constructed by means of expert knowledge modelling. We propose using theory-driven structural equation modelling (SEM) to identify and structure latent variables in a Bayesian network. The linking of SEM and Bayesian networks is motivated by the fact that both methods can be shown to be causal models. We compare this approach to a data-driven approach where latent factors are induced by means of unsupervised learning. We identify appropriate metrics for URREF ontology criteria for both approaches.