Derivation of Theory by Means of Factor Analysis or Tom Swift and His Electric Factor Analysis Machine

The American Statistician, pp. 17-21, December 2004

6 Pages Posted: 25 Jan 2005 Last revised: 1 Jan 2012

See all articles by J. Scott Armstrong

J. Scott Armstrong

University of Pennsylvania - Marketing Department

Abstract

Problems in the use of factor analysis for deriving theory are illustrated by means of an example in which the underlying factors are known. The actual underlying model is simple and it provides a perfect explanation of the data. While the factor analysis explains a large proportion of the total variance, it fails to identify the known factors in the model, The illustration is used to emphasize that factor analysis, by itself, may be misleading as far as the development of theory is concerned. The use of a comprehensive, and explicit a priori analysis is proposed so that there will be independent criteria for the evaluation of the factor analytic results.

Keywords: factor analysis, factor analysis results

Suggested Citation

Armstrong, J. Scott, Derivation of Theory by Means of Factor Analysis or Tom Swift and His Electric Factor Analysis Machine. The American Statistician, pp. 17-21, December 2004. Available at SSRN: https://ssrn.com/abstract=654041

J. Scott Armstrong (Contact Author)

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-5087 (Phone)
215-898-2534 (Fax)

HOME PAGE: http://marketing.wharton.upenn.edu/people/faculty/armstrong.cfm

Register to save articles to
your library

Register

Paper statistics

Downloads
48
Abstract Views
543
PlumX Metrics