Addressing misallocation of variance in principal components analysis of event-related potentials

Interpretation of evoked response potentials is complicated by the extensive superposition of multiple electrical events. The most common approach to disentangling these features is principal components analysis (PCA). Critics have demonstrated a number of caveats that complicate interpretation, notably misallocation of variance and latency jitter. This paper describes some further caveats to PCA as well as using simulations to evaluate three potential methods for addressing them: parallel analysis, oblique rotations, and spatial PCA. An improved simulation model is introduced for examining these issues. It is concluded that PCA is an essential statistical tool for event-related potential analysis, but only if applied appropriately.