Uncovering and Treating Unobserved Heterogeneity with FIMIX-PLS: Which Model Selection Criterion Provides an Appropriate Number of Segments?

Since its first introduction in the Schmalenbach Business Review, Hahn et al.’s (2002) finite mixture partial least squares (FIMIX-PLS) approach to response-based segmentation in variance-based structural equation modeling has received much attention from the marketing and management disciplines. When applying FIMIX-PLS to uncover unobserved heterogeneity, the actual number of segments is usually unknown. As in any clustering procedure,...