A number of theorems are proved for the characterization of the optimal reference variables using the factor analysis estimation methods FABIN based on instrumental variables due to Hägglund (1982). The different theorems consider several alternative situations with at most three non-optimal reference variables involved. Cases with an arbitrary number of of factors are considered. A fundamental definition called FABIN-dominant diagonal is introduced. The theorems are based on this concept.

 Key words: factor analysis, instrumental variables, reference variables. 

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Last update: 1997-12-16 / KH