A Call for Theory to Support the Use of Causal-Formative Indicators: A Commentary on Bollen and Diamantopoulos (2017)

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In this issue, Bollen and Diamantopoulos (2017) defend causal-formative indicators against several common criticisms leveled by scholars who oppose their use. In doing so, the authors make several convincing assertions: Constructs exist independently from their measures; theory determines whether indicators cause or measure latent variables; and reflective and causal-formative indicators are both subject to interpretational confounding. However, despite being a well-reasoned, comprehensive defense of causal-formative indicators, no single article can address all of the issues associated with this debate. Thus, Bollen and Diamantopoulos leave a few fundamental issues unresolved. For example, how can researchers establish the reliability of indicators that may include measurement error? Moreover, how should researchers interpret disturbance terms that capture sources of influence related to both the empirical definition of the latent variable and to the theoretical definition of the construct? Relatedly, how should researchers reconcile the requirement for a census of causal-formative indicators with the knowledge that indicators are likely missing from the empirically estimated latent variable? This commentary develops 6 related research questions to draw attention to these fundamental issues, and to call for future research that can lead to the development of theory to guide the use of causal-formative indicators.

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