Statistical alchemy - the misuse of factor scores in linear regression

Cataldo Zuccaro

Linear regression and factor analysis are probably the most employed statistical techniques in market research.

Statistical alchemy the misuse of factor scores in linear regression

Cataldo Zuccaro

University of Quebec in Montreal

Introduction

The developments of the microprocessor and large-scale statistical software such as SPSS, SAS and BMPD have had an inestimable impact on the theory and practice of management research in general and market research in particular. It is now possible to employ large samples to study a variety of important market phenomena such as brand preference and purchase, brand switching, consumer perceptions of products and services, and service quality evaluation – to mention but a few. In addition, with such powerful software...

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