The Measurement of Factor Indeterminacy

Abstract

Results obtained by Guttman [1955] on the determinacy of common factors have been thought to have disturbing consequences for the common factor model. It is argued that factors must be thought of as unobservable, and uniquely defined but numerically indeterminate. It follows that Guttman's measure of indeterminacy is inconsistent with the foundations of the factor model in probability theory, and the traditional measures of factor indeterminacy used by earlier writers should be reinstated. These yield no disturbing conclusions about the model.

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