SmartPLS - Measure Validity

We need to evaluate the measurement model before we can know how reliable and valid the model is. As I explained in the earlier post HERE, reliability can be measured by assessing the composite reliability and Cronbach's Alpha whereas validity can be measured through convergent and discriminant validity.

Have you download SmartPLS software? If "YES", you can just proceed to test the validity. If "NO", you can download the software and install it into your computer. In this post, I'll show you step by step on how to calculate validity. 

First, we need to examine the cross-loadings since they are the dominant approaches to measure discriminant validity.

Step 1: Asses indicator loadings by clicking "Default Result" --> "PLS" --> "Calculation Results" --> "Outer Loadings"

The table below shows a complete table of the outer loadings

From the table, we can see that all reflective indicators have loadings of 0.636 and higher. SmartPLS provide outer loadings and outer weights for all construct in the PLS path model, regardless of whether they are measured reflectively or formatively.

Step 2: Assess the Fornell-Larcker criterion, click "Report" --> "PLS" --> "Quality Criteria" --> "Latent Variable Criterion

This is the last step in analysing the cross-loadings. For reflective measurement model, we use Fornell-Larcker criterion. Fornell-Larcker criterion is the second and more conservative approach in assessing discriminant validity. It compares the square root of the AVE values with the latent variable correlations. The square root of each construct's AVE should be greater than its highest correlation with any other construct. The logic of this method is based on the idea that a construct shares more variance with its associated indicators than with any other construct.

The table below shows the Fornell-Larcker criterion before we calculate the square root of AVE

From the table above, we include the values of the square root of AVE

Finally, the table of Fornell-Larcker criterion is complete

These are the needed step in measuring the validity through SmartPLS. So, how can we explain those number? What are those number supposed to mean? Actually, you can refer these papers, HERE and HERE to understand how to analyse our collected data.

Till next time. Be safe and take care! 

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