A comparison of four approaches to account for method effects in latent state-trait analyses

Latent state-trait (LST) analysis is frequently applied in psychological research to determine the degree to which observed scores reflect stable person-specific effects, effects of situations and/or person-situation interactions, and random measurement error. Most LST applications use multiple repeatedly measured observed variables as indicators of latent trait and latent state residual factors. In practice, such indicators often show shared indicator-specific (or method) variance over time. In this article, the authors compare 4 approaches to account for such method effects in LST models and discuss the strengths and weaknesses of each approach based on theoretical considerations, simulations, and applications to actual data sets. The simulation study revealed that the LST model with indicator-specific traits (Eid, 1996) and the LST model with M - 1 correlated method factors (Eid, Schneider, & Schwenkmezger, 1999) performed well, whereas the model with M orthogonal method factors used in the early work of Steyer, Ferring, and Schmitt (1992) and the correlated uniqueness approach (Kenny, 1976) showed limitations under conditions of either low or high method-specificity. Recommendations for the choice of an appropriate model are provided.