A comparative study on the performance of maximum likelihood, generalized least square, scale-free least square, partial least square and consistent partial least square estimators in structural equation modeling

Abstract

Structural equation modeling offers various estimation methods for estimating parameters. The most used method in covariance-based structural equation modeling (CB-SEM) is the maximum likelihood (ML) estimator. The ML estimator is typically used when fitting models with normally distributed data. The growth of partial least squares path modeling (PLS-PM), including consistent partial least squares (PLSc), has also been noticed by researchers in the SEM fields. The PLSc has elevated interest in the scholastic setting in measuring the performance of various estimation methods in structural equation modeling. The choice of estimation methods has substantial impact in yielding parameter estimates. There could be a trade-off among the estimation methods’ ability to deal with different types of data based on the model tested. Accordingly, this study aims to compare the performance of ML, generalized least squares (GLS), and scale-free least squares (SFLS) for CB-SEM as well as partial least squares (PLS) and consistent partial least squares (PLSc). Multivariate normal data were generated using Monte Carlo simulation with pre-determined population parameters and sample sizes using R Programming packages. To produce the estimated values, data analysis was performed using AMOS and SmartPLS for CB-SEM and PLS-SEM, respectively. The findings illustrate notable similarities between CB-SEM (ML) and PLS-SEM results when the true indicator loading is certainly high.