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Till now, factor analysis finds limited applicability in economic research. Undeniably, advancement in behavioural sciences owes a great deal to factor analysis. To continue to neglect factor analysis in economic research is to stunt further development of economics. This book intends to popularize the use of factor analysis in economics and management sciences. It discusses extensively topics including purposes and uses of factor analysis, principles of factor analysis, methods and procedure of factor analysis and application of factor analysis in economic research. These topics have been treated in a way that would enhance professionalism in economics, business and management in the following areas: policy formulation, policy implementation, decision making, development of theories, validation of theories and public policy analysis. Lecturers and students in the universities shall also find the book useful for teaching and learning. The authors are not unmindful of the usual global dread for symbols, notations and figures. Therefore, efforts were made to use simple illustrations devoid of tedious mathematical computations which could swamp the procedures adopted in the book.