Model Misspecification: Contrasting Formative and Reflective Indicators for a Model of E-Service Quality

The issue of model specification is a topic that needs more attention in the academic community due to the potentially flawed managerial conclusions that can result from model misspecification.

Abstract

This paper discusses the managerial and theoretical implications of model misspecification-specifically, formative versus reflective construct conceptualization, measurement, and modeling of e-service quality. Service quality has a long history of using reflective indicators in its conceptualization. Recently, researchers have started to question the traditional conceptualization by noting that service quality may be better represented by formative rather than reflective indicators. We undertook a study of e-service quality and analyzed the data using a formative conceptualization, as well as a traditional reflective conceptualization. The results of our comparison demonstrated very different managerial conclusions for the two specifications. Thus, we conclude that the issue of model specification is a topic that needs more attention in the academic community due to the potentially flawed managerial conclusions that can result from model misspecification.