Term: Factor Analysis
Last Updated: 2009-08-27
A statistical procedure that identifies the common variance amongst a set of observed variables (i.e., indicators), and creates a factor (i.e., index) comprised of that common variance. The factor scores are calculated with a linear equation that incorporates a weighted contribution of each of the variables that are included in the analysis. The contribution (i.e., weight) of each variable is relative to the amount of variance in common with the other variables.