Abstract

The PLS path analysis algorithm has been used in numerous research papers in various branches of the social sciences. Prior literature has conflated the generation of coefficients without abnormally terminating, as equivalent to estimating with small samples. This research shows that: (1) PLS path estimates are biased and highly dispersed with small samples; (2) sample sizes must grow very large to control this bias and dispersion with dispersion ∝1/log (sample size) and bias ∝1/(sample size) ; and finally (3) the power of PLS hypothesis tests is low at most effect levels, leading PLS software to generate a disproportionate number of false positives.

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