Measurement invariance matters: A case made for the ORTOFIN

In this paper, it is argued that the measurements of an underlying, latent variable cannot straightforwardly be used in group comparisons without testing whether the measurements relate to the latent variable in the same way for all groups. The procedure for testing this is discussed and is illustrated by assessing measurement invariance across groups with a different socio-economic status (SES) for the ORTOFIN, a scale measuring an individuals’ orientation toward finances [Loix, E., Pepermans, R., Mentens, C., Goedee, M., & Jegers, M. (2005). Orientation toward finances: Development of a measurement scale. The Journal of Behavioral Finance, 6, 192–201]. The results show that one factor of the ORTOFIN, i.e. ‘‘financial information”, is invariant across SES groups while ‘‘personal financial planning” lacks measurement invariance. Implications of these results are discussed.