Factor Analysis


I run a Factor Analysis and got 14 factors with an Eigenvalue above 1!

The first 5 factors explain most of the variance (Eigenvalue >2) and the remaining 9 factors have an eigenvalue around 1.5

What shall I do? Shall I keep all 14 factors or extract only the first 5 that explain most of the variance?

Thank you in advance! :)


TS Contributor
Focus on the Factors that account for most of the variance. The remaining factors will contrinute little to your model and will probably add confusion.


No cake for spunky
Using eigenvalues is an old method of determining how many factors to use that is not ideal.

The default in most statistical software packages is to retain all factors with eigenvalues greater than 1.0.There is broad consensus in the
literature that this is among the least accurate methods for selecting the number of factors to retain (Velicer & Jackson, 1990). In monte carlo analyses we performed to test this assertion, 36% of our samples retained too many factors using this criterion.

Parallel analysis is a much better way to extract factors. Starting on page 102 of this article (which is in English despite the initial summary) it describes how to do parallel analysis including an applet that makes it very simple.


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