Which of the following methods can be used to determine the number of factors to be extracted in Exploratory Factor Analysis (EFA):

A. Lisrel Analysis
B. Scree Test
C. Eigenvalue Criteria
D. Rotation

Correct option is B

Sol.
The correct methods for determining the number of factors to extract in Exploratory Factor Analysis (EFA) are:

• Scree Test (B): This involves plotting the eigenvalues of factors in descending order. The "elbow" or point where the curve flattens indicates the optimal number of factors.
• Eigenvalue Criteria (C): Also called the Kaiser criterion, it suggests retaining factors with eigenvalues greater than 1, as these factors explain a substantial portion of the variance.

Information Booster:

1. Scree Test is visual and subjective but widely used.
2. Eigenvalue Criteria is numerical, often used alongside the scree test.
3. Parallel analysis is another method comparing eigenvalues from data to random values.
4. Bartlett’s test and KMO measure sampling adequacy for EFA.

Additional Information:

• Lisrel Analysis (Option A): Focuses on SEM and path modeling, not factor extraction in EFA.
• Rotation (Option D): Orthogonal (e.g., Varimax) or oblique (e.g., Promax) rotations refine factor interpretation post-extraction.