Problems with formative and higher-order reflective variables

Nick Lee*, John W. Cadogan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Cadogan and Lee (this issue) discuss the problems inherent in modeling formative latent variables as endogenous. In response to the commentaries by Rigdon (this issue) and Finn and Wang (this issue), the present article extends the discussion on formative measures. First, the article shows that regardless of whether statistical identification is achieved, researchers are unable to illuminate the nature of a formative latent variable. Second, the study clarifies issues regarding formative indicator weighting, highlighting that the weightings of formative components should be specified as part of the construct definition. Finally, the study shows that higher-order reflective constructs are invalid, highlights the damage their use can inflict on theory development and knowledge accumulation, and provides recommendations on a number of alternative models which should be used in their place (including the formative model).

Original languageEnglish
Pages (from-to)242-247
Number of pages6
JournalJournal of Business Research
Volume66
Issue number2
Early online date31 Aug 2012
DOIs
Publication statusPublished - Feb 2013

Keywords

  • dimensionality
  • formative
  • higher-order construct
  • measurement
  • multidimensional
  • reflective
  • second-order factor
  • unidimensional

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