Correcting the t statistic for measurement error

Studies in marketing often involve application of multi-item scales to measure latent constructs. Once the psychometric properties of a scale have been assessed, responses to individual scale items are often summed to form a composite score, which then is compared across groups by performing statistical tests such as a t test. In this note, we draw researchers’ attention to an often overlooked fact that the t test is attenuated by imperfect measures. As a solution, we propose the disattenuated t statistic and discuss how it would increase accuracy of estimates and affect decisions in the marketing discipline. Copyright Springer Science+Business Media, LLC 2012