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Measurement invariance matters: A case made for the ORTOFIN

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  • Hofmans, J.
  • Pepermans, R.
  • Loix, E.
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    Abstract

    In this paper, it is argued that the measurements of an underlying, latent variable cannot straightforwardly be used in group comparisons without testing whether the measurements relate to the latent variable in the same way for all groups. The procedure for testing this is discussed and is illustrated by assessing measurement invariance across groups with a different socio-economic status (SES) for the ORTOFIN, a scale measuring an individuals' orientation toward finances [Loix, E., Pepermans, R., Mentens, C., Goedee, M., & Jegers, M. (2005). Orientation toward finances: Development of a measurement scale. The Journal of Behavioral Finance, 6, 192-201]. The results show that one factor of the ORTOFIN, i.e. ''financial information", is invariant across SES groups while ''personal financial planning" lacks measurement invariance. Implications of these results are discussed.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Psychology.

    Volume (Year): 30 (2009)
    Issue (Month): 4 (August)
    Pages: 667-674

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    Handle: RePEc:eee:joepsy:v:30:y:2009:i:4:p:667-674

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    Web page: http://www.elsevier.com/locate/joep

    Related research

    Keywords: Factorial validity Structural equation modeling Socio-economic status Financial orientation;

    References

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    1. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
    2. William Meredith, 1993. "Measurement invariance, factor analysis and factorial invariance," Psychometrika, Springer, vol. 58(4), pages 525-543, December.
    3. Wood, Michael, 1998. "Socio-economic status, delay of gratification, and impulse buying," Journal of Economic Psychology, Elsevier, vol. 19(3), pages 295-320, June.
    4. Lea, Stephen E. G. & Webley, Paul & Walker, Catherine M., 1995. "Psychological factors in consumer debt: Money management, economic socialization, and credit use," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 681-701, December.
    5. Steenkamp, Jan-Benedict E M & Baumgartner, Hans, 1998. " Assessing Measurement Invariance in Cross-National Consumer Research," Journal of Consumer Research, University of Chicago Press, vol. 25(1), pages 78-90, June.
    6. Stone, Brice & Maury, Rosalinda Vasquez, 2006. "Indicators of personal financial debt using a multi-disciplinary behavioral model," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 543-556, August.
    7. Lea, Stephen E. G. & Webley, Paul & Levine, R. Mark, 1993. "The economic psychology of consumer debt," Journal of Economic Psychology, Elsevier, vol. 14(1), pages 85-119, March.
    8. Roderick McDonald, 1989. "An index of goodness-of-fit based on noncentrality," Journal of Classification, Springer, vol. 6(1), pages 97-103, December.
    9. Michael R Mullen, 1995. "Diagnosing Measurement Equivalence in Cross-National Research," Journal of International Business Studies, Palgrave Macmillan, vol. 26(3), pages 573-596, September.
    10. Kirchler, Erich & Niemirowski, Apolonia & Wearing, Alexander, 2006. "Shared subjective views, intent to cooperate and tax compliance: Similarities between Australian taxpayers and tax officers," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 502-517, August.
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