MIT-WPU | School of Health Sciences & Technology
(M.Sc. clinical psychology )
WORLD’S FIRST UNIVERSITY
FOR LIFE TRANSFORMATION
Research Methodology
Dr Heenakshi Bhansali
Faculty, School of Health Sciences & Technology
(M.Sc. Clinical Psychology)
Factor Analysis
Factor analysis is a statistical technique used to uncover the
underlying structure of a set of variables. Factor analysis aims to
identify common factors that explain the variance of the observed
variables.
The method was developed in the early 1900s by Charles Spearman,
a psychologist interested in understanding the complexities of human
intelligence. Spearman found that measures of different cognitive
abilities were interrelated and could be efficiently expressed in terms
of a single underlying factor, “the one great common Intellective
Function,” also known as general intelligence or the g factor.
Factor Analysis
Factor analysis uses the correlation structure amongst observed
variables to model a smaller number of unobserved, latent variables
known as factors.
Analysts refer to the observed variables as indicators because they
indicate information about the factor. Factor analysis treats these
indicators as linear combinations of the factors in the analysis plus an
error. The procedure assesses how much of the variance each factor
explains within the indicators. The idea is that the latent factors
create commonalities in some of the observed variables.
Factor Analysis
For example:
Socioeconomic status (SES) is a factor researchers can’t measure
directly. However, they can assess occupation, income, and education
levels.
These variables all relate to socioeconomic status. People with a
particular socioeconomic status tend to have similar values for the
observable variables. If the socioeconomic status has a strong
relationship with these indicators, then it accounts for a large portion
of the variance in the indicators.
Assumptions of Factor Analysis
Linearity: Factor analysis assumes that the relationship between
variables is linear.
Independence: Variables are assumed to be independent of each
other.
Normality: The data should follow a normal distribution.
Sample size: Factor analysis requires a large sample size to achieve
accurate results.
Homoscedasticity: The variance of the variables should be equal
across all levels of the factors.
Goals of Factor Analysis
Identify underlying factors or dimensions that explain the pattern of
correlations among a set of observed variables.
Simplify data analysis and provide insight into the relationships
among variables.
Help to identify latent constructs or variables that may not be directly
measured but are important in explaining the relationships among the
observed variables.
Help to develop theories about the underlying causes of the
observed patterns of correlations.
Factor Analysis
Some basic terms and concepts related to factor analysis:
Factor: A latent variable that underlies a set of observed variables and
accounts for their covariance.
Loading: The correlation between a factor and an observed variable,
indicating the strength of the relationship between them.
Extraction: The process of identifying the factors from a set of observed
variables.
Factor Analysis
Some basic terms and concepts related to factor analysis:
Rotation: The process of rotating the extracted factors to make them
easier to interpret.
Communalities: The proportion of the variance in an observed variable
that is explained by the factors.
Eigenvalue: A measure of the amount of variance explained by each
factor.
Applications of Factor Analysis
Market research: Factor analysis can be used to identify consumer
preferences and to segment customers based on their preferences.
Psychology: Factor analysis can be used to identify personality traits,
intelligence, and mental disorders.
Education: Factor analysis can be used to evaluate the effectiveness
of educational programs.
Finance: Factor analysis can be used to analyze the performance of
stocks, bonds, and other investments.
Advantages of Factor Analysis
Identifies hidden patterns: Factor analysis can help identify hidden
patterns in the data that may not be visible through other methods.
Simplifies data: Factor analysis can reduce the number of variables,
making it easier to analyze the data.
Improves accuracy: Factor analysis can improve the accuracy of
predictions and classifications.
Generates hypotheses: Factor analysis can help generate hypotheses
about relationships between variables.
Disadvantages of Factor Analysis
Assumptions: Factor analysis requires several assumptions to be
met, which may not always be realistic.
Subjectivity: Factor analysis involves subjective decisions about
which factors to retain, which can lead to different results depending
on the analyst.
Sample size: Factor analysis requires a large sample size to achieve
accurate results, which can be time-consuming and costly.
Interpretation: The results of factor analysis can be difficult to
interpret, especially when the factors are not clearly defined.
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