Derivation of Theory by Means of Factor Analysis, or Tom Swift and His Electric Factor Analysis Machine

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 a priori analysis is proposed so that there will be independent criteria for the evaluation of the factor analytic results. It has not been uncommon for social scientists to draw upon analogies from the physical sciences in their discussions of scientific methods. They look with envy at some of the mathematical advances ,in the physical sciences and one gets the impression that the social sciences are currently on the verge of some major mathematical advances. Perhaps they are – but there are many social scientists who would disagree. Their position is that we really don't know enough about what goes into our mathematical models in order to expect results that are meaningfullyrelated to anything in the “real world.” In other words, the complaint is not that the models are no good or that they don't really give us optimum results; rather it is that the assumptions on which the model is based do not provide a realistic representation of the world as it exists. And it is in this area where the social sciences differ from the physical sciences. But now, thanks to recent advances in computer technology, and to refinements in mathematics, social scientists can analyze masses of data and determine just what the world is like. Armchair theorizing has lost some of its respectability. The computer provides us with objective results.