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Predictive model assessment in PLS-SEM: guidelines for using PLSpredict


Shmueli, Galit and Sarstedt, Marko and Hair, Joseph F. and Cheah, Jun Hwa and Ting, Hiram and Vaithilingam, Santha and Ringle, Christian M. (2019) Predictive model assessment in PLS-SEM: guidelines for using PLSpredict. European Journal of Marketing, 53 (11). pp. 2322-2347. ISSN 0309-0566


Purpose – Partial least squares (PLS) has been introduced as a “causal-predictive” approach to structural equation modeling (SEM), designed to overcome the apparent dichotomy between explanation and prediction. However, while researchers using PLS-SEM routinely stress the predictive nature of their analyses, model evaluation assessment relies exclusively on metrics designed to assess the path model’s explanatory power. Recent research has proposed PLSpredict, a holdout sample-based procedure that generates case-level predictions on an item or a construct level. This paper offers guidelines for applying PLSpredict and explains the key choices researchers need to make using the procedure. Design/methodology/approach – The authors discuss the need for prediction-oriented model evaluations in PLS-SEM and conceptually explain and further advance the PLSpredict method. In addition, they illustrate the PLSpredict procedure’s use with a tourism marketing model and provide recommendations on how the results should be interpreted. While the focus of the paper is on the PLSpredict procedure, the overarching aim is to encourage the routine prediction-oriented assessment in PLS-SEM analyses. Findings – The paper advances PLSpredict and offers guidance on how to use this prediction-oriented model evaluation approach. Researchers should routinely consider the assessment of the predictive power of their PLS path models. PLSpredict is a useful and straightforward approach to evaluate the out-of-sample predictive capabilities of PLS pathmodels that researchers can apply in their studies. Research limitations/implications – Future research should seek to extend PLSpredict’s capabilities, for example, by developing more benchmarks for comparing PLS-SEM results and empirically contrasting the earliest antecedent and the direct antecedent approaches to predictive power assessment. Practical implications – This paper offers clear guidelines for using PLSpredict, which researchers and practitioners should routinely apply as part of their PLS-SEManalyses. Originality/value – This research substantiates the use of PLSpredict. It provides marketing researchers and practitioners with the knowledge they need to properly assess, report and interpret PLS-SEM results. Thereby, this research contributes to safeguarding the rigor of marketing studies using PLS-SEM.

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Additional Metadata

Item Type: Article
Divisions: School of Business and Economics
DOI Number: https://doi.org/10.1108/EJM-02-2019-0189
Publisher: Emerald Publishing
Keywords: PLS-SEM; Partial least squares; Structural equation modeling; PLSpredict; Out-of-sample prediction; Predictive power
Depositing User: Ms. Nur Faseha Mohd Kadim
Date Deposited: 04 Dec 2020 06:37
Last Modified: 04 Dec 2020 06:37
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1108/EJM-02-2019-0189
URI: http://psasir.upm.edu.my/id/eprint/81789
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