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Latent variables refer to variables that cannot be directly observed. These variable are defined in terms of observable variables. In narrow sense, "latent variable" is seen/modeled as what generates the observed variables in an implied data generation process. Also called hidden or lurking variables.

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I wanted to make a clarification regarding the original question. In item response theory, the discrimination (i.e. item slope or factor loading) is not indicative of difficulty. Using a model that al …
answered Jan 2 '12 by David