I have a total of 19 Likert scale variables. I want to see which variables are related to one another (describe one common concept) and combine them together.
My method:
1. Perform a factor analysis and check the variables which have higher than 0.6 factor loadings for each factor.
2. I take these variables with high factor loadings and calculate Cronbach's Alpha.
3. if the Cronbach's Alpha is higher than 0.8 i combine the variables together by calculating the mean.
Can you please tell me if my method has any logical errors? What do you think about the method?
PS: The variables are needed for a panel regression