Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors.For example, it is possible that variations in four observed variables mainly reflect the variations in two unobserved variables.xploratory factor analysis (EFA) is used to identify complex interrelationships among items and group items that are part of unified concepts. The researcher makes no a priori assumptions about relationships among factors.