The purpose of this study intends to understand the issues recently occurred between formative and reflective latent variables in social science. Through the dialogue between formative and reflective latent variables, it is known that interpretational confounding is the key issue. Compared to reflective latent variable, formative latent variable is easier to produce interpretational confounding. Due to this reason, some scholars regard that reflective latent variable is a better option in theory testing. But some other scholars argue the bias can occur when formative latent variables were misspecified as reflective. Therefore, they encourage researchers to use formative latent variable. In sum, we think that if there is a good fit between theory and parameter's interpretation, formative latent variable can be done for a limited range of cases.
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