ATLASResearch
methods
Quantitative/ Analysis

Exploratory factor analysis

Explore a plausible latent measurement structure

Exploratory factor analysis models shared covariance among indicators using a smaller set of latent factors. Unlike PCA, it distinguishes common from unique variance. Extraction, number of factors and rotation require reasoned choices; oblique rotation allows correlated factors. EFA is exploratory even when software produces precise loadings and attractive factor labels.

WHEN IT FITS

Use when several indicators may reflect underlying dimensions but the structure is insufficiently specified for confirmation. Ensure the indicators cover the construct and the sample can support stable covariance estimation.

Strengths

  • Reveals patterns of shared indicator variance
  • Supports assessment and refinement of measurement structure

Limitations

  • Factor retention and rotation involve judgement
  • Solutions can be sample-specific and difficult to replicate

Know the boundary

A factor label is an interpretation, and EFA alone does not establish that a psychological entity exists.

USED ACROSS
Banking & financeBusiness & MBAPsychologyComputer scienceEducation