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Partial Least Squares Path Modeling

Partial least squares path modeling (PLS-PM) is a statistical method used to estimate complex cause-effect relationships between observed and latent variables. It differs from covariance-based structural equation modeling by maximizing the explained variance rather than reproducing a sample covariance matrix. A PLS-PM model consists of a measurement model linking observed variables to latent variables and a structural model linking latent variables. An iterative algorithm estimates the latent variables to solve the structural equation model. PLS-PM has become popular in social sciences for analyzing and testing conceptual models with latent variables, aided by software like SmartPLS.

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112 views2 pages

Partial Least Squares Path Modeling

Partial least squares path modeling (PLS-PM) is a statistical method used to estimate complex cause-effect relationships between observed and latent variables. It differs from covariance-based structural equation modeling by maximizing the explained variance rather than reproducing a sample covariance matrix. A PLS-PM model consists of a measurement model linking observed variables to latent variables and a structural model linking latent variables. An iterative algorithm estimates the latent variables to solve the structural equation model. PLS-PM has become popular in social sciences for analyzing and testing conceptual models with latent variables, aided by software like SmartPLS.

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Partial least squares path modeling

semPLS

The partial least squares path modeling (PLS-PM,


PLS-SEM) [1][2] method to structural equation modeling allows estimating complex cause-eect relationship
models with latent variables. It is a component-based estimation approach that diers from the covariance-based
structural equation modeling. Unlike the covariancebased approach to structural equation modeling, PLS
path modeling does not reproduce a sample covariance
matrix. It is more oriented towards maximizing the
amount of variance explained (prediction) rather than statistical accuracy of the estimates.

Commercial

SmartPLS 3 Screenshot; http://www.smartpls.com

The PLS structural equation model is composed of


two sub-models: the measurement model and structural
model. The measurement model represents the relationships between the observed data and the latent variables.
The structural model represents the relationships between
the latent variables.

2 References
[1] Hair, J.F.; Hult, G.T.M.; Ringle, C.M.; Sarstedt, M.
(2014). A Primer on Partial Least Squares Structural
Equation Modeling (PLS-SEM). Thousand Oaks, CA:
Sage. ISBN 9781452217444.

An iterative algorithm solves the structural equation


model by estimating the latent variables by using the measurement and structural model in alternating steps, hence
the procedures name, partial. The measurement model
estimates the latent variables as a weighted sum of its
manifest variables. The structural model estimates the
latent variables by means of simple or multiple linear regression between the latent variables estimated by the
measurement model. This algorithm repeats itself until
convergence is achieved.

[2] Vinzi, V. E.; Trinchera, L.; Amato, S (2010). Handbook


of partial least squares. Springer Berlin Heidelberg.
[3] Lee, L.; Petter, S.; Fayard, D.; Robinson, S. (2011). On
the Use of Partial Least Squares Path Modeling in Accounting Research. International Journal of Accounting
Information Systems 12 (4): 305328.
[4] Sarstedt, M.; Ringle, C.M.; Smith, D.; Reams, R.; Hair,
J.F. (2014). Partial Least Squares Structural Equation
Modeling (PLS-SEM): A Useful Tool for Family Business
Researchers. Journal of Family Business Strategy 5 (1):
105115. doi:10.1016/j.jfbs.2014.01.002.

With the availability of software applications such


as SmartPLS, PLS-SEM became particularly popular in social sciences disciplines such as accounting,[3]
family business,[4] marketing,[5] management information systems,[6] operations management,[7] and strategic management.[8] Recently, areas such as engineering,
environmental sciences, medicine, and political sciences
more broadly use PLS-SEM to estimate complex causeeect relationship models with latent variables. Thereby,
they analyse, explore and test their established and underlying their conceptual models and theory.

PLS-Graph
PLS-GUI
SmartPLS
WarpPLS
ADANCO

[5] Sarstedt, M.; Ringle, C.M.; Hair, J.F.; Mena, J.A. (2012).
An Assessment of the Use of Partial Least Squares Structural Equation Modeling in Marketing Research. Journal
of the Academy of Marketing Science 40 (3): 414433.
doi:10.1007/s11747-011-0261-6.
[6] Ringle, C.M.; Sarstedt, M.; Straub, D.W. (2012). A
Critical Look at the Use of PLS-SEM in MIS Quarterly
(PDF). MIS Quarterly 36 (1): iii-xiv.
[7] Peng, D.X.; Lai, F. (2012). Using Partial Least Squares
in Operations Management Research: A Practical Guideline and Summary of Past Research. Journal of Operations Management 30 (6): 467480.

PLS-SEM specic software


Open source

[8] Hair, J.F.; Sarsteft, M.; Pieper, T.; Ringle, C.M. (2012).
The Use of Partial Least Squares Structural Equation
Modeling in Strategic Management Research: A Review
of Past Practices and Recommendations for Future Applications. Long Range Planning 45 (5-6): 320340.
doi:10.1016/j.lrp.2012.09.008.

R has several contributed packages dealing


with PLS path modeling such as:
matrixpls
plspm
1

3 TEXT AND IMAGE SOURCES, CONTRIBUTORS, AND LICENSES

Text and image sources, contributors, and licenses

3.1

Text

Partial least squares path modeling Source: https://en.wikipedia.org/wiki/Partial_least_squares_path_modeling?oldid=704999329 Contributors: Michael Hardy, JohnWilliams, Varnent, Download, BG19bot, Nojokes375, PLSuseR, AndiAndreas and Anonymous: 8

3.2

Images

3.3

Content license

Creative Commons Attribution-Share Alike 3.0

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