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Consistent Partial Least Squares for Nonlinear Structural Equation Models

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  • Theo Dijkstra
  • Karin Schermelleh-Engel

Abstract

Partial Least Squares as applied to models with latent variables, measured indirectly by indicators, is well-known to be inconsistent. The linear compounds of indicators that PLS substitutes for the latent variables do not obey the equations that the latter satisfy. We propose simple, non-iterative corrections leading to consistent and asymptotically normal (CAN)-estimators for the loadings and for the correlations between the latent variables. Moreover, we show how to obtain CAN-estimators for the parameters of structural recursive systems of equations, containing linear and interaction terms, without the need to specify a particular joint distribution. If quadratic and higher order terms are included, the approach will produce CAN-estimators as well when predictor variables and error terms are jointly normal. We compare the adjusted PLS, denoted by PLSc, with Latent Moderated Structural Equations (LMS), using Monte Carlo studies and an empirical application. Copyright The Psychometric Society 2014

Suggested Citation

  • Theo Dijkstra & Karin Schermelleh-Engel, 2014. "Consistent Partial Least Squares for Nonlinear Structural Equation Models," Psychometrika, Springer;The Psychometric Society, vol. 79(4), pages 585-604, October.
    • Handle: RePEc:spr:psycho:v:79:y:2014:i:4:p:585-604
    DOI: 10.1007/s11336-013-9370-0
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    References listed on IDEAS

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