On the Interpretation of Factor Analysis

J. Armstrong

General Economics and Teaching from University Library of Munich, Germany

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.

Keywords: factor; analysis (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Pages: 5 pages
Date: 2005-02-04
New Economics Papers: this item is included in nep-hpe
Note: Type of Document - pdf; pages: 5
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Related works:
Working Paper: On the interpretation of factor analysis (1968)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpgt:0502003

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