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Factor Analysis Class

Factor analysis is a data reduction technique used to identify underlying factors that explain correlations among variables, creating a smaller set of uncorrelated variables. Key statistics include Bartlett's test of sphericity, Eigenvalues, and the Kaiser-Meyer-Olkin measure, which assess the appropriateness and effectiveness of the analysis. Methods for determining the number of factors include a priori knowledge, Eigenvalue thresholds, scree plots, and variance percentages.

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14 views9 pages

Factor Analysis Class

Factor analysis is a data reduction technique used to identify underlying factors that explain correlations among variables, creating a smaller set of uncorrelated variables. Key statistics include Bartlett's test of sphericity, Eigenvalues, and the Kaiser-Meyer-Olkin measure, which assess the appropriateness and effectiveness of the analysis. Methods for determining the number of factors include a priori knowledge, Eigenvalue thresholds, scree plots, and variance percentages.

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anubhavj2001
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© © All Rights Reserved
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Factor Analysis

Factor Analysis
• Factor analysis is a class of procedures used for data
reduction and summarization.
• It is an interdependence technique: no distinction
between dependent and independent variables.

• Factor analysis is used:


– To identify underlying dimensions, or factors, that
explain the correlations among a set of variables.
– To identify a new, smaller, set of uncorrelated variables
to replace the original set of correlated variables.
Factor Analysis Model
• The first set of weights (factor score coefficients)
are chosen so that the first factor explains the
largest portion of the total variance.

• Then a second set of weights can be selected,


so that the second factor explains most of the
residual variance, subject to being uncorrelated
with the first factor.

• This same principle applies for selecting


additional weights for the additional factors.
Statistics Associated with Factor Analysis
• Bartlett's test of sphericity. Bartlett's test of sphericity is
used to test the hypothesis that the variables are
uncorrelated in the population (H0-Rejeted)
• Eigenvalue. Represents the total variance explained by
each factor.
• Factor loadings. Correlations between the variables and
the factors.
Statistics Associated with Factor Analysis

• Kaiser-Meyer-Olkin (KMO) measure of sampling


adequacy. Used to examine the appropriateness of factor
analysis. High values (between 0.5 and 1.0) indicate
appropriateness. Values below 0.5 imply not.
• Percentage of variance. The percentage of the total
variance attributed to each factor.
• Scree plot. A scree plot is a plot of the Eigenvalues against
the number of factors in order of extraction.
Determine the Method of Factor Analysis
• In Principal components analysis, the total variance in
the data is considered.
-Used to determine the min number of factors that will
account for max variance in the data.

• .
Determine the Number of Factors

• A Priori Determination. Use prior knowledge.

• Determination Based on Eigenvalues. Only factors with


Eigenvalues greater than 1.0 are retained.

• Determination Based on Scree Plot. A scree plot is a plot


of the Eigenvalues against the number of factors in order of
extraction. The point at which the scree begins denotes the
true number of factors.

• Determination Based on Percentage of Variance.


Interpret Factors

• A factor can be interpreted in terms of the


variables that load high on it.
• SPSS\Factor Analysis.sav

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