Identifying the best common factor model via exploratory eactor analysis

Currently, there is no solid criterion for judging the quality of the estimators in factor analysis. This paper presents a new evaluation method for exploratory factor analysis that pinpoints an appropriate number of factors along with the best method for factor extraction. The proposed technique consists of two steps: testing the normality of the residuals from the fitted model via the Shapiro-Wilk test and using an empirical quantified index to judge the quality of the factor model. Examples are presented to demonstrate how the method is implemented and to verify its effectiveness.