Terms

# Manifest Variable: What it Means, How it Works, Example

## What Is a Manifest Variable?

A manifest variable is a directly measurable or observable variable or factor. It is the opposite of a latent variable, which cannot be directly observed and requires a manifest variable as an indicator to test its presence.

A manifest variable is also known as an observable variable or a measured variable.

### Key Takeaways

• A manifest variable can be directly studied by a researcher or statistician.
• A manifest variable is the opposite of a latent variable, which is hidden and cannot be directly observed.
• Latent variable models use manifest variables to determine the existence of latent variables.
• Researchers use manifest variables to analyze and categorize financial or scientific models.

## Understanding Manifest Variable

Statisticians use several techniques to analyze manifest variables and latent variables, including factor analysis, latent trait analysis, latent profile analysis, and latent class analysis. The model used depends on the nature of the variables.

Manifest variables are used in latent variable statistical models to test the relationships between manifest variables and latent variables. A latent variable, also known as a factor or a construct, cannot be observed directly.

Comparing manifest and latent variables helps assess factors such as customer satisfaction, product loyalty, and company reliability. Latent variable models are also used to evaluate investments.

Manifest variables are useful in models of latent variables that are otherwise hard to determine.

## Manifest Variable Use Example

Manifest and latent variables can be used to measure factors in business, such as customer satisfaction. Actual customer satisfaction is a latent factor that can only be measured in comparison to observable factors.

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Suppose retailer Home Delight wants to assess customer satisfaction with its new line of throw pillows. It may hire a statistical research firm or conduct its own research, using manifest variables. This could involve surveys, analyzing customer comments on platforms like Amazon, or studying variables such as sales numbers, price per sale, regional purchasing trends, customer gender and age, percentage of return customers, and customer rankings. All of this is done to measure the latent factor of customer satisfaction.

Suppose retailer Home Delight wants to assess customer satisfaction with its new line of throw pillows. It may hire a statistical research firm or conduct its own research, using manifest variables. This could involve surveys, analyzing customer comments on platforms like Amazon, or studying variables such as sales numbers, price per sale, regional purchasing trends, customer gender and age, percentage of return customers, and customer rankings. All of this is done to measure the latent factor of customer satisfaction.