'''Latent variables''', as opposed to [[observable variable]]s, are those [[variable]]s that cannotare benot directly observed but are rather inferred from other variables that can beare observed and directly measured. Latent variables are also called '''hidden variables''', '''model parameters''', '''hypothetical variables''' or '''hypothetical constructs'''. Examples include [[quality of life]], business confidence, morale, happiness, conservatism. The use of latent variables is common in [[social science]]s, [[robotics]], and to an extent [[economics]]; but the exact definition of latent variables varies in these domains.
One advantage of using latent variables is that it [[Dimensionality reduction|reduces the dimensionality]] of data. A large number of observable variables can be aggregated to represent an underlying concept, making it easier for humans to understand the data. In this sense, they serve the same function as theories in general do in science. At the same time, the latent variables are the link between observable ("sub-symbolic") data in the real world, andto symbolic data in the modeled world.
