Problems with formative and higher-order reflective variables

Nick Lee and John W. Cadogan

Journal of Business Research, 2013, vol. 66, issue 2, 242-247

Abstract: Cadogan and Lee (this issue) discuss the problems inherent in modeling formative latent variables as endogenous. In response to the commentaries by Rigdon (this issue) and Finn and Wang (this issue), the present article extends the discussion on formative measures. First, the article shows that regardless of whether statistical identification is achieved, researchers are unable to illuminate the nature of a formative latent variable. Second, the study clarifies issues regarding formative indicator weighting, highlighting that the weightings of formative components should be specified as part of the construct definition. Finally, the study shows that higher-order reflective constructs are invalid, highlights the damage their use can inflict on theory development and knowledge accumulation, and provides recommendations on a number of alternative models which should be used in their place (including the formative model).

Keywords: Measurement; Reflective; Formative; Second-order factor; Higher-order construct; Unidimensional; Multidimensional; Dimensionality (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:66:y:2013:i:2:p:242-247

DOI: 10.1016/j.jbusres.2012.08.004

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