Factor analysis starts with the premise that one cannot measure some variables of interest directly. These latent variables, termed factors, influence observable variables. Factor analysis is a statistical procedure that seeks to determine the existence and strength of relationships among the factors themselves and between factors and observable variables. Factor analysis is one of several similar procedures, including path analysis and instrumental variables, generally referred to as structural equation modeling.

There are two basic types of factor analysis: exploratory factor analysis (EFA) and confirmatory factor analysis (CFA). While a reference simply to “factor analysis” generally implies EFA, this entry will refer either to EFA or to CFA to minimize confusion.

EFA does not begin with a model, but instead begins with measurements of observable variables, which the ...