Factor Analysis with (Mixed) Observed and Latent Variables in the Exponential Family

PSYCHOMETRIKA - VOL. 66, NO. 4, 515–530, DECEMBER 2001

16 Pages Posted: 14 Feb 2014

See all articles by Michel Wedel

Michel Wedel

University of Maryland - Robert H. Smith School of Business, Marketing Department; University of Groningen - Faculty of Economics and Business

Wagner A. Kamakura

Rice University

Date Written: 2001

Abstract

We develop a general approach to factor analysis that involves observed and latent variables that are assumed to be distributed in the exponential family. This gives rise to a number of factor models not considered previously and enables the study of latent variables in an integrated methodological framework, rather than as a collection of seemingly unrelated special cases. The framework accommodates a great variety of different measurement scales and accommodates cases where different latent variables have different distributions. The models are estimated with the method of simulated likelihood, which allows for higher dimensional factor solutions to be estimated than heretofore. The models are illustrated on synthetic data. We investigate their performance when the distribution of the latent variables is mis-specified and when part of the observations are missing. We study the properties of the simulation estimators relative to maximum likelihood estimation with numerical integration. We provide an empirical application to the analysis of attitudes.

Keywords: factor model, simulated likelihood, latent variable model

Suggested Citation

Wedel, Michel and Kamakura, Wagner A., Factor Analysis with (Mixed) Observed and Latent Variables in the Exponential Family (2001). PSYCHOMETRIKA - VOL. 66, NO. 4, 515–530, DECEMBER 2001. Available at SSRN: https://ssrn.com/abstract=2395309

Michel Wedel (Contact Author)

University of Maryland - Robert H. Smith School of Business, Marketing Department ( email )

College Park, MD 20742
United States
301.405.2162 (Phone)
301.405.0146 (Fax)

HOME PAGE: http://www.rhsmith.umd.edu/marketing/faculty/wedel.html

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Wagner A. Kamakura

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
(713) 348-6307 (Phone)

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