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RE: st: Coding scale items for factor analysis

From   Cameron McIntosh <>
Subject   RE: st: Coding scale items for factor analysis
Date   Thu, 23 Aug 2012 21:47:17 -0400

Factor analysis may or may not be appropriate, given the nature of the supposed latent variables/common factors. Make sure you are consistently precise about the definition/meaning of the observables. For example, it is really "perceptions of the impact of wind energy on ..... " I also suspect that you may be in a formative rather than reflective measurement model situation.. a hot topic these days.
Buis, M.L. (yyyy). Combining information from multiple variables using models for causal indicators The Stata Journal, vv(ii), 1–14.
Bollen, K.A., & Bauldry, S. (2011). Three Cs in measurement models: Causal indicators, composite indicators, and covariates. Psychological Methods, 16(3), 265-284. 
Bollen, K.A. (2011). Evaluating Effect, Composite, and Causal Indicators in Structural Equation Models. MIS Quarterly, 35(2), 359-372.
Hardin, A.M., & Marcoulides, G.A. (2011). A Commentary on the Use of Formative Measurement. Educational and Psychological Measurement, Online First.
Hardin, A.M., Chang, J.C.-J., Fuller, M.A., & Torkzadeh, G. (2011). Formative Measurement and Academic Research: In Search of Measurement Theory. Educational and Psychological Measurement, 71(2), 281-305.
> Subject: st: Coding scale items for factor analysis
> From:
> Date: Thu, 23 Aug 2012 19:27:28 -0400
> To:
> > I have a question in my survey in which I ask people about the impacts they think wind energy will have on a number of economic indicators.
> > These factors are coded on a 6 point scale:
> > Increase a lot ; Increase ; No Impact ; Decrease ; Decrease a lot ;Not sure
> > Items I have are, for example, Coastal Tourism and Electricity Prices.
> > I have a number of these items and would like to run a factor analysis on these items so as to include a summary value of a factor in my regression rather than adding each item individually.
> > How do I code these items with this scale for factor analysis in Stata?
> > I was thinking of 
> > 1 = Decrease a lot ..... to .... 5 = Increase a lot, but what do I do with NOT SURE?
> > Also - an increase in "coastal tourism" would be a good thing, while an increase in "Electricity Prices" would be a bad thing. Does this matter? Do I still code these the same? Or does the order on the coding reverse in some way?
> > Any advice would be much appreciated!
> > Kind regards
> > Sanja
> > 
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