Development of Hungarian counties is described generally using the indicator GDP per capita. This is a very simply approach because this phenomena is more complex, it is multidimensional problem. We argue that development of counties is a latent variable. A linear regression cannot be made because the dependent variable is unknown. But a special factor analytic method is able to give a solution for this problem. The unobserved dependent variable is influenced by determinants and in turn has an effect on the indicators. Using the LISREL estimation procedure, it is possible to quantify the relative development level of counties. This method is used in calculation of hidden economy but we can prove that this is a useful method to quantify other latent variables. Having a measure of development it can be analysed the assumption that the integration into the global value chain of Hungary has a significant impact on development of counties during the period reviewed.