Marketing or methodology? Exposing the fallacies of PLS with simple demonstrations

Abstract

Purpose: Over the past 20 years, partial least squares (PLS) has become a popular method in marketing research. At the same time, several methodological studies have demonstrated problems with the technique but have had little impact on its use in marketing research practice. This study aims to present some of these criticisms in a reader-friendly way for non-methodologists. Design/methodology/approach: Key critiques of PLS are summarized and demonstrated using existing data sets in easily replicated ways. Recommendations are made for assessing whether PLS is a useful method for a given research problem. Findings: PLS is fundamentally just a way of constructing scale scores for regression. PLS provides no clear benefits for marketing researchers and has disadvantages that are features of the original design and cannot be solved within the PLS framework itself. Unweighted sums of item scores provide a more robust way of creating scale scores. Research limitations/implications: The findings strongly suggest that researchers abandon the use of PLS in typical marketing studies. Practical implications: This paper provides concrete examples and techniques to practicing marketing and social science researchers regarding how to incorporate composites into their work, and how to make decisions regarding such. Originality/value: This work presents a novel perspective on PLS critiques by showing how researchers can use their own data to assess whether PLS (or another composite method) can provide any advantage over simple sum scores. A composite equivalence index is introduced for this purpose.