A frequent criticism of exploratory factor analysis (EFA) is that it does not allow correlated residuals to be modelled, while they can be routinely specified in the confirmatory (CFA) model. In this article, we propose an EFA approach in which both the common factor solution and the residual matrix are unrestricted (i.e., the correlated residuals…

This article considers models involving a single structural equation with latent explanatory and/or latent dependent variables where discrete items are used to measure the latent variables. Our primary focus is the use of scores as proxies for the latent variables and carrying out ordinary least squares (OLS) regression on such scores to estimate…