A Monte Carlo Investigation of the Likelihood Ratio Test for Number of Classes in Latent Class Analysis

When using latent class analysis to explore multivariate categorical data an important question is -- how many classes are appropriate for this data? An obvious candidate to answer the question is the likelihood ratio test of c[SUB0] against c[SUB1] classes. In this paper this test is investigated by Monte Carlo methods; results confirm that the usually assumed null distribution is inappropriate.