Treating reflective indicators as causal-formative indicators in order to compute factor score estimates or unit-weighted scales

TL;DR

This paper discusses the implications of treating reflective indicators as causal-formative in factor analysis to justify the computation of individual scores, emphasizing the importance of model fit for validity.

Contribution

It highlights the need to justify the causal assumption when using factor scores and unit-weighted scales derived from reflective indicators.

Findings

Scores are based on treating reflective indicators as causal-formative.

Model fit should be examined to validate the scores.

Justification of causal assumptions is crucial for score validity.

Abstract

Individual scores on common factors are required in some applied settings (e.g., business and marketing settings). Common factors are based on reflective indicators, but their scores cannot unambiguously be determined. Therefore, factor score estimates and unit-weighted scales are used in order to provide individual scores. It is shown that these scores are based on treating the reflective indicators as if they were causal-formative indicators. This modification of the causal status of the indicators should be justified. Therefore, the fit of the models implied by factor score estimates and unit-weighted scales should be investigated in order to ascertain the validity of the scores.