Formative variables are unreal variables: why the formative MIMIC model is invalid

In this rejoinder, we provide a response to the three commentaries written by Diamantopoulos, Howell, and Rigdon (all this issue) on our paper The MIMIC Model and Formative Variables: Problems and Solutions (also this issue). We contrast the approach taken in the latter paper (where we focus on clarifying the assumptions required to reject the formative MIMIC model) by spending time discussing what assumptions would be necessary to accept the use of the formative MIMIC model as a viable approach. Importantly, we clarify the implications of entity realism and show how it is entirely logical that some theoretical constructs can be considered to have real existence independent of their indicators, and some cannot. We show how the formative model only logically holds when considering these ‘unreal’ entities. In doing so, we provide important counter-arguments for much of the criticisms made in Diamantopoulos’ commentary, and the distinction also helps clarify a number of issues in the commentaries of Howell and Rigdon (both of which in general agree with our original paper). We draw together these various threads to provide a set of conceptual tools researchers can use when thinking about the entities in their theoretical models. © 2013, Academy of Marketing Science.