PLS Features

• Fewer restrictions (soft form), especially on data distribution

and sample size
• Variance based approach
• Error terms of manifest variables has mean zero and variance
1

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PLS Algorithm
• Step 1: Initialization
• Step 2: Inner Approximation
• Weighing schemes (Centroid, factorial and path)
• Step 3: Outer Approximation
• Step 4: Estimating Factor Scores
• Step 5: If the relative change of all the outer weights from
one iteration to the next are smaller than a predefined
tolerance, the estimation of factor scores done in Step 4 is
taken to be final. Otherwise go back to Step 2

2
PLS Algorithm
• Step 1: Initialization

• Step 2: Inner Approximation

• Weighing schemes (Centroid, factorial and path)

3
PLS Algorithm
• Step 3: Outer Approximation

• Step 4: Estimating Factor Scores

4
PLS Algorithm
• Step 5: If the relative change of all the outer weights from
one iteration to the next are smaller than a predefined
tolerance,

the estimation of factor scores done in Step 4 is taken to be

final.
• Otherwise go back to Step 2

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PLS-SEM Limitation
• No agreed goodness-of-fit index (Hair Jr, et al., 2013, p.185)
• estimates are not optimal regarding bias and consistency
(Hair, Ringle and Sardstedt, 2011, p. 143).