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On the Interpretation of Factor Analysis

Author

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  • J.S. Armstrong

    (The Wharton School)

Abstract

The importance of the researcher^Rs interpretation of factor analysis is illustrated by means of an example. The results from this example appear to be meaningful and easily interpreted. The example omits any measure of reliability or validity. If a measure of reliability had been included, it would have indicated the worthlessness of the results. A survey of 46 recent papers from 6 journals supported the claim that the example is typical, two-thirds of the papers provide no measure of reliability. In fact, some papers did not even provide sufficient information to allow for replication. To improve the current situation some measure of factor reliability should accompany applied studies that utilize factor analysis. Three operational approaches are suggested for obtaining measures of factor reliability: use of split samples, Monte Carlo simulation, and a priori models.

Suggested Citation

  • J.S. Armstrong, 2005. "On the Interpretation of Factor Analysis," General Economics and Teaching 0502003, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpgt:0502003
    Note: Type of Document - pdf; pages: 5
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/get/papers/0502/0502003.pdf
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    References listed on IDEAS

    as
    1. Louis Guttman, 1954. "Some necessary conditions for common-factor analysis," Psychometrika, Springer;The Psychometric Society, vol. 19(2), pages 149-161, June.
    2. J. Guilford, 1961. "Psychological measurement a hundred and twenty-five years later," Psychometrika, Springer;The Psychometric Society, vol. 26(1), pages 109-127, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    factor analysis;

    JEL classification:

    • A - General Economics and Teaching

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