Marketing Papers

Document Type

Journal Article

Date of this Version

December 1967


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 à priori analysis is proposed so that there will be independent criteria for the evaluation of the factor analytic results.


Postprint version. Published in The American Statistician, Volume 21, Number 5, December 1967, pages 17-21. The author has asserted his/her right to include this material in ScholarlyCommons@Penn.



Date Posted: 27 June 2006