Model Selection and Average Proportion Explained Variance in Exploratory Factor Analysis.

A procedure for evaluating the average R-squared index for a given set of observed variables in an exploratory factor analysis model is discussed. The method can be used as an effective aid in the process of model choice with respect to the number of factors underlying the interrelationships among studied measures. The approach is developed within the framework of exploratory structural equation modeling and is readily applicable with popular statistical software. The outlined procedure is illustrated using a numerical example.