Using second order latent variables in WarpPLS

The blog post below refers to a procedure employed with earlier versions of WarpPLS. For a more recent, and less time-consuming, approach see the video linked immediately below. The video shows how to create and use second (and higher) order latent variables with WarpPLS.

http://youtu.be/bkO6YoRK8Zg

***

Second order latent variables (LVs) can be implemented in WarpPLS 1.0 through two steps. These steps are referred to as Step 1 and Step 2 in the paragraphs below. Higher order LVs can also be implemented, following a similar procedure, but with additional steps.

With second order LVs, a set of LV scores are used as indicators of a LV. Often second order LVs are decompositions of a formative LV into a few reflective LVs. The scores of the component reflective LVs are used as indicators of the original formative LV.

In Step 1, you will create models that relate LVs to their indicators. Only the LVs and their indicators should be included. No links between LVs should be created. This will allow you to calculate the LV scores for the LVs, based on the indicators. You will then save the LV scores using the option “Save factor scores into a tab-delimited .txt file”, available from the “Save” option of the “View and save results” window menu.

In Step 2, you will create a new model where the saved LV scores are indicators of a new LV. This LV is usually called the second order LV, although sometimes the indicators (component LVs) are referred to as second order LVs. The rest of the data will be the same. Note that you will have to create and read the raw data used in the SEM analysis again, for this second step.