The Theoretical Status of Latent Variables

This article examines the theoretical status of latent variables as used in modern test theory models. First, it is argued that a consistent interpretation of such models requires a realist ontology for latent variables. Second, the relation between latent variables and their indicators is discussed. It is maintained that this relation can be interpreted as a causal one but that in measurement models for interindividual differences the relation does not apply to the level of the individual person. To substantiate intraindividual causal conclusions, one must explicitly represent individual level processes in the measurement model. Several research strategies that may be useful in this respect are discussed, and a typology of constructs is proposed on the basis of this analysis. The need to link individual processes to latent variable models for interindividual differences is emphasized. Consider the following sentence: " Einstein would not have been able to come up with his e ϭ mc 2 had he not possessed such an extraordinary intelligence. " What does this sentence express? It relates observable behavior (Einstein's writing e ϭ mc 2) to an unobservable attribute (his extraordinary intelligence), and it does so by assigning to the unobservable attribute a causal role in bringing about Einstein's behavior. In psychology, there are many constructs that play this type of role in theories of human behavior; examples are constructs like extraversion, spatial ability, self-efficacy, and attitudes. Such variables are usually referred to as latent variables. It is common to investigate the structure and effect of unobservables like intelligence through the analysis of interindividual differences data by statistically relating covariation between observed variables to latent variables. This is done, for example, in the widely used factor model. The idea is that although the fit of a latent variable model to the data may not prove the existence of causally operating latent variables, the model does formulate this as a hypothesis; consequently, the fit of such models can be adduced as evidence supporting this hypothesis. Finally, it is often suggested that the type of causal relation tested in latent variable modeling is similar to the relation between Einstein's intelligence and behavior in the above example; that is, the latent variable exerts influence at the level of the individual. Given the intuitive appeal of explaining a wide range of behaviors by invoking a limited number of latent variables, it is not surprising that latent variables analysis has become a …