Psychological Methods, Vol 30(3), Jun 2025, 482-512; doi:10.1037/met0000552
Measurement invariance (MI) is one of the main psychometric requirements for analyses that focus on potentially heterogeneous populations. MI allows researchers to compare latent factor scores across persons from different subgroups, whereas if a measure is not invariant across all items and persons then such comparisons may be misleading. If full MI does not hold further testing may identify problematic items showing differential item functioning (DIF). Most methods developed to test DIF focused on simple scenarios often with comparisons across two groups. In practical applications, this is an oversimplification if many grouping variables (e.g., gender, race) or continuous covariates (e.g., age) exist that might influence the measurement properties of items; these variables are often correlated, making traditional tests that consider each variable separately less useful. Here, we propose the application of Bayesian Moderated Nonlinear Factor Analysis to overcome limitations of traditional approaches to detect DIF. We investigate how modern Bayesian shrinkage priors can be used to identify DIF items in situations with many groups and continuous covariates. We compare the performance of lasso-type, spike-and-slab, and global-local shrinkage priors (e.g., horseshoe) to standard normal and small variance priors. Results indicate that spike-and-slab and lasso priors outperform the other priors. Horseshoe priors provide slightly lower power compared to lasso and spike-and-slab priors. Small variance priors result in very low power to detect DIF with sample sizes below 800, and normal priors may produce severely inflated type I error rates. We illustrate the approach with data from the PISA 2018 study. (PsycInfo Database Record (c) 2025 APA, all rights reserved)