- The final decision about the number of factors to choose is the number of factors for the rotated solution that is most interpretable.
- To identify factors, group variable that have large loadings for the same factor.
- Plots of loading provide a visual for variable clusters.
- Interpret factors according to the meaning of the variables.
This decision should be guided by :
- A priori conceptual beliefs about the number of factors from past research or theory.
- Eigen values computed in step 2.
- The relative interpretability of rotated solutions computed in step 3.