**Factor analysis (FA) **is a statistical method of reducing a large set of data to a smaller set by identifying patterns in the data that have common characteristics. Factor analysis is sometimes called data reduction or dimension reduction.

The original numerical values in the data set are **observed variables (also called manifest variables) **such as the items in a large survey or test. Factor analysis may find patterns characterized by a shared statistical relationship representing a factor, which is also called a **dimension**. A researcher examines the content of the items linked to this factor and chooses a factor label such as verbal skills for related items on an intelligence test.

The factors may be treated as variables in additional research. These are secondary variables. Because they are created from the observed variables, they are considered latent variables. For example, if 5 items on a personality test are associated with one factor labeled "agreeableness" then agreeableness is a latent variable.

The set of identified factors is referred to as the **structure **of the data set. If the data are from a test then researchers refer to the structure of the test.

Factors are identified based on the **variance **they account for in the data. The amount of variance explained by a factor is represented by an eigenvalue. Researchers look for eigenvalues of 1.0 or more to consider a factor to be a valuable contribution to explaining the underlying structure of a data set.

Not all factors are equal. That is, when more than one factor have been identified, they will contribute differently to explaining the variance in the data set.

**Different kinds of Factor Analysis**

**Exploratory Factor Analysis (EFA).** When researchers do not know the structure of a data set, they use EFA to discover the set of factors.

**Confirmatory Factor Analysis (CFA).** When researchers wish to test a hypothesis about a data set, they perform CFA. For example, if they believe their forgiveness questionnaire contains one factor called forgiveness, they can examine the structure to see if one factor best accounts for the data set. If one factor is the best solution then they have found support for their hypothesis.

**Principal Components Analysis (PCA)** is a common form of confirmatory factor analysis.

Factor Analysis is important to understanding tests in Counseling and Psychotherapy. See

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**Factor Analysis is often used to reduce the data collected from survey research. **

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