The primary purposes of this study were to investigate both the appropriate
ness and the implications of incorporating a testlet definition into the es
timation of the conditional standard error of measurement (SEM) for tests c
omposed of testlets. When individual items are used as the fundamental meas
urement unit with tests composed of testlets, the assumptions required by m
easurement modeling are violated, but those assumptions are satisfied when
testlet scores are used as the measurement unit. Therefore, item-based esti
mation methods probably introduce some magnitude of bias in the estimates o
f conditional SEMs for tests composed of testlets. The five conditional SEM
estimation methods used in this study were classified as either item-based
or testlet-based methods. In general, the item-based methods provide lower
estimates of the conditional SEM along the score scale than do the testlet
-based methods.