The impact of the average error variance of indicators can be understood in terms of communality.

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The communality of an indicator refers to the amount of variance in the indicator that is accounted for by the underlying construct or factor it is measuring. The average error variance of indicators refers to the amount of variance in the indicator that is due to measurement error. Therefore, a high average error variance will lower the communality of the indicator, as more of its variance is due to error rather than the construct it is intended to measure.

The Impact of the Average Error Variance of Indicators Can