I am using factor analysis to model the underlying structure of social capital. My data consists of individual responses expressing how often they interacted with other individuals in a specific year, measured by 10 different variables. For each variable, my intention is to discretize the counts into five intervals, with qualitative labels going from "never" to "very often".
The sample size is 496 individuals, and - for example - in one specific variable 74% have zero interactions per year, while 23% have had interactions between one and 6 times per year. I have also "outlier" respondents, for example 1 observation with 96 interactions and 1 observation with 260 interactions. The source of my confusion is how heavily skewed the sample is towards zero interactions as well as the few outliers. I believe this is preventing me from using conventional bin sizing rules.
I am aware of a similar answer posted by Kevin, but I believe the problem here is different, since I want to use the interval frequencies to feed my model.