Ideal, nonideal, and no-marker variables: The confirmatory factor analysis (CFA) marker technique works when it matters

Larry J. Williams, Ernest H. O'Boyle

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Abstract

A persistent concern in the management and applied psychology literature is the effect of common method variance on observed relations among variables. Recent work (i.e., Richardson, Simmering, & Sturman, 2009) evaluated 3 analytical approaches to controlling for common method variance, including the confirmatory factor analysis (CFA) marker technique. Their findings indicated significant problems with this technique, especially with nonideal marker variables (those with theoretical relations with substantive variables). Based on their simulation results, Richardson et al. concluded that not correcting for method variance provides more accurate estimates than using the CFA marker technique. We reexamined the effects of using marker variables in a simulation study and found the degree of error in estimates of a substantive factor correlation was relatively small in most cases, and much smaller than error associated with making no correction. Further, in instances in which the error was large, the correlations between the marker and substantive scales were higher than that found in organizational research with marker variables. We conclude that in most practical settings, the CFA marker technique yields parameter estimates close to their true values, and the criticisms made by Richardson et al. are overstated.

Original languageEnglish
Pages (from-to)1579-1602
Number of pages24
JournalJournal of Applied Psychology
Volume100
Issue number5
DOIs
StatePublished - Sep 1 2015

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Keywords

  • Common method variance
  • Confirmatory factor analysis
  • Marker variable

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