Problem with Multicollinearity in covariance based analysis

Frequently asked questions about PLS path modeling.
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achmadghazali
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Problem with Multicollinearity in covariance based analysis

Post by achmadghazali » Mon Feb 13, 2012 1:14 am

I have data with certain indicator that has multicollinearity. The analysis using covariance based show some problems however PLS shows no problem at all. Can I use this as a reason to use PLS for my analysis? Thanks

mronkko
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Post by mronkko » Tue Feb 14, 2012 6:06 pm

Probably not. There is generally very little research showing that PLS would be able to reject false models and there is at least one study that shows that this is indeed the case http://aisel.aisnet.org/icis2010_submissions/21/

How exactly to treat multicollinearity depends on your data and research question.

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