The source identification method is a standard psychophysical procedure for studying the ability of listeners to localize the source of a sound. The method can be described in terms of a statistical model in which listeners’ responses are determined by the width and bias of an internal distribution. This article presents a theoretical study of the method, particularly the relationships between the average experimental observables, rms error and variability, and parameters of the internal distribution. The theory is tested against source-identification experiments, both easy and difficult. Of particular interest is the experimental dependence of observable statistics on the number of sources in the stimulus array, compared with theoretical predictions. It is found that the model gives a good account of several systematic features seen in the experiments. The model leads to guidelines for the design and analysis of source-identification experiments.