Latent Growth Modeling for Information Systems: Theoretical Extensions and Practical Applications

Abstract

This paper presents and extends Latent Growth Modeling (LGM) as a complementary method for analyzing longitudinal data, modeling the process of change over time, testing time-centric hypotheses, and building longitudinal theories. We first describe the basic tenets of LGM and offer guidelines for applying LGM to Information Systems (IS) research, specifically how to pose research questions that focus on change over time and how to implement LGM models to test time-centric hypotheses. Second and more important, we theoretically extend LGM by proposing a model validation criterion, namely “d-separation,” to evaluate why and when LGM works and test its fundamental properties and assumptions. Our d-separation criterion does not rely on any distributional assumptions of the data; it is grounded in the fundamental assumption of the theory of conditional independence. Third, we conduct extensive simulations to examine a multitude of factors that affect LGM performance. Finally, as a practical application, we apply LGM to model the relationship between word-of-mouth communication (online product reviews) and book sales over time with longitudinal 26-week data from Amazon. The paper concludes by discussing the implications of LGM for helping IS researchers develop and test longitudinal theories.