After running the Latent Class analysis, the output does not show a clear number of groups (segments) that fit best with my data.

The CAIC and BIC keep decreasing when the number of groups increases. Though, the relative Chi Square is highest at the two group solution.

What do I have to do?

I heard it is possible to do a cross-validation and/or test for overfitting. But how does this work in Sawtooth? And how do I have to interpret the output?

I hope you can help me out.

Thank you in advance!

Though, I still have some questions.

I indeed want to develop classess for strategic purposes. But now Latent Class shows me that 7 groups would have the lowest CAIC and BIC, but it is not desirable to have 7 segments to interpret. I don't know what to do with this.

What is possible within Sawtoot regarding cross-validation and overfitting? I think the algorythm of my data is too complicated.

Thank you in advance.