Heuristics versus statistics in discriminant validity testing: a comparison of four procedures

By George R. Franke, Marko Sarstedt. Internet Research, 2019

1,545 citations recorded by the source corpus.

Purpose The purpose of this paper is to review and extend recent simulation studies on discriminant validity measures, contrasting the use of cutoff values (i.e. heuristics) with inferential tests. Design/methodology/approach Based on a simulation study, which considers different construct correlations, sample sizes, numbers of indicators and loading patterns, the authors assess each criterion’s sensitivity to type I and type II errors. Findings The findings of the simulation study provide further evidence for the robustness of the heterotrait–monotrait (HTMT) ratio of correlations criterion as an estimator of disattenuated (perfectly reliable) correlations between constructs, whose performance parallels that of the standard constrained PHI approach. Furthermore, the authors identify situations in which both methods fail and suggest an alternative criterion. Originality/value Addressing the limitations of prior simulation studies, the authors use both directional comparisons (i.e. heuristics) and inferential tests to facilitate the comparison of the HTMT and PHI methods. Furthermore, the simulation considers criteria that have not been assessed in prior research.

Subfields: Computer Networks and Communications, Management Science and Operations Research, Statistics and Probability

View Paper: https://www.semanticscholar.org/paper/4910cb266e8c741b4ef83ec0900406f14dade934

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In Computer Networks and Communications

In Management Science and Operations Research

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Citations in the corpus

Sampling weight adjustments in partial least squares structural equation modeling: guidelines and illustrations (2020, background): “The results in Table 5 show that most of the HTMT values were significantly lower than 0.9 (Franke & Sarstedt, 2019).”
Entrepreneurial orientation and new venture performance in emerging markets: the mediating role of opportunity recognition (2021, background): “90 indicates that the discriminant validity has been established (Franke and Sarstedt 2019).”
Structural model robustness checks in PLS-SEM (2020, background): “As part of these debates, researchers identified blind spots in PLS-SEM, which methodologists were quick to fill by developing methodological improvements (Franke and Sarstedt, 2019; Henseler et al., 2015; Sharma et al., 2019b).”