One common reason for running Principal Component Analysis (PCA) or Factor Analysis (FA) is variable reduction.
In other words, you may start with a 10-item scale meant to measure something like Anxiety, which is difficult to accurately measure with a single question.
You could use all 10 items as individual variables in an analysis–perhaps as predictors in a regression model.
But you’d end up with a mess.
Not only would you have trouble interpreting all those coefficients, but you’re likely to have multicollinearity problems.
And most importantly, you’re not interested in the effect of each of those individual 10 items on your [Read more…] about How To Calculate an Index Score from a Factor Analysis