Finite Mixture and Genetic Algorithm Segmentation in Partial Least Squares Path Modeling: Identification of Multiple Segments in Complex Path Models

Abstract

When applying structural equation modeling methods, such as partial least squares (PLS) path modeling, in empirical studies, the assumption that the data have been collected from a single homogeneous population is often unrealistic. Unobserved heterogeneity in the PLS estimates on the aggregate data level may result in misleading interpretations. Finite mixture partial least squares (FIMIX-PLS) and PLS genetic algorithm segmentation (PLS-GAS) allow the classification of data in variance-based structural equation modeling. This research presents an initial application and comparison of these two methods in a computational experiment in respect of a path model which includes multiple endogenous latent variables. The results of this analysis reveal particular advantages and disadvantages of the approaches. This study further substantiates the effectiveness of FIMIX-PLS and PLS-GAS and provides researchers and practitioners with additional information they need to proficiently evaluate their PLS path modeling results by applying a systematic means of analysis. If significant heterogeneity were to be uncovered by the procedures, the analysis may result in group-specific path modeling outcomes, thus allowing further differentiated and more precise conclusions to be formed.