SEMinR Lecture Series - Higher Order Construct Analysis

A Reflective-Reflective Higher Order model is assessed in two stages.

Stage 1

• In the first stage create and estimate the model connecting all the lower-order components (Including Exogenous and Endogenous constructs). The model assessment first focuses on the reflective measurement models of the lower-order components. No Higher Order Constructs are modeled. Only LOCs for the HOCs are added to the estimation. In the first stage all the LOCs are assessed for Reliability and Validity. The Measurement model is assessed as we normally do. for further detail, Click Here
• After the Measurement model is assessed and reported (to learn how to report, Click here), use Latent Variable Score and save it in your data file to be used in the Second Stage.

Stage 2

• In stage two, the latent variable scores of the lower-order components from stage one are used to create and estimate for the stage two model. (In SEMinR we do not need to do this manually as we have to in SmartPLS).
• The evaluation of stage two starts with focusing on the reflective measurement model of the higher-order component. For HOC, see the loadings of LOC for the HOC, assess the CR and AVE using the coefficients (loadings) enabling us to establish indicator reliabilities and AVE.
• These results above the critical value of 0.5. Cronbach’s alpha, CR and AVE establish reliability and convergent validity. Based on the HTMT criterion, discriminant validity with other LOCs can been established.
• Finally, the strcutural model is assessed for hypotheses testing.

Reference

Sarstedt, M., Hair Jr, J. F., Cheah, J. H., Becker, J. M., & Ringle, C. M. (2019). How to specify, estimate, and validate higher-order constructs in PLS-SEM. Australasian Marketing Journal (AMJ), 27(3), 197-211.