Collinear Latent Variables in Multilevel Confirmatory Factor Analysis: A Comparison of Maximum Likelihood and Bayesian Estimations

Because variables may be correlated in the social and behavioral sciences, multicollinearity might be problematic. This study investigates the effect of collinearity manipulated in within and between levels of a two-level confirmatory factor analysis by Monte Carlo simulation. Furthermore, the influence of the size of the intraclass correlation coefficient (ICC) and estimation method; maximum likelihood estimation with robust chi-squares and standard errors and Bayesian estimation, on the convergence rate are investigated. The other variables of interest were rate of inadmissible solutions and the relative parameter and standard error bias on the between level. The results showed that inadmissible solutions were obtained when there was between level collinearity and the estimation method was maximum likelihood. In the within level multicollinearity condition, all of the solutions were admissible but the bias values were higher compared with the between level collinearity condition. Bayesian estimation appeared to be robust in obtaining admissible parameters but the relative bias was higher than for maximum likelihood estimation. Finally, as expected, high ICC produced less biased results compared to medium ICC conditions.