What is factor analysis?

Factor analysis is used to assess or determine relationships between variables. It is often used in the social sciences. Factor analysis is a technique that is used to reduce a large number of variables into fewer numbers of factors. It extracts maximum common variance from all variables and puts them into a common score. As an index of all variables, we can use this score for further analysis. Factor analysis is part of general linear model (GLM) and this method also assumes several assumptions: there is linear relationship, there is no multicollinearity, it includes relevant variables into analysis, and there is true correlation between variables and factors. Several methods are available, but principle component analysis is used most commonly.