First, you have to check your data to see that the assumptions behind the factor analysis hold. If your data “passes” these assumptions, you will have a valid result.
Checklist
| Ratio/interval/ordinal variables | Your variables should be continuous (i.e. interval/ratio) or ordinal (but still approximately continuous). For example: Income, height, weight, number of years of schooling, or ratings. |
| Linear associations | The variables in the factor analysis should be associated with each other in a linear fashion (use scatterplots to check, see Scatterplot). |
| Sample size | Factor analysis requires rather large samples. However, recommendations on this topic vary greatly. Some recommendations highlight the absolute sample size (here, lower limits range from n=100 to n=500) whereas others say that subject-to-variable ratio is important (and here, ratios from 2:1 to 20:1 are suggested). |
| No outliers | An outlier is an extreme (low or high) value. For example, if most individuals have a test score between 40 and 60, but one individual has a score of 96 or another individual has a score of 1, this will distort the test. |
Suppose that we have asked a bunch of individuals six questions about their health. We conduct a factor analysis to see how many dimensions these questions reflect: do all questions reflect only one dimension (namely “health”) or can they be categorised into two or more dimensions (i.e. different types of health)?