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    RUBY ANN A. MATUTINO-factorial Analysis

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    Ruby Ann Almazan Matutino
    Factor analysis is a statistical technique used to investigate relationships between complex concepts that cannot be directly measured by collapsing many variables into underlying factors. It assumes that multiple observed variables correlate because they are associated with a common latent variable. For example, income, education, and occupation may correlate because they are related to socioeconomic status. Factors are ordered by how much of the total variance they explain. The eigenvalue indicates how much variance a factor explains, with higher eigenvalues explaining more variance. Factor loadings express the strength of the relationship between each variable and the underlying factor, similar to a correlation coefficient, and are used to interpret the meaning of the factors.

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    RUBY ANN A. MATUTINO-factorial Analysis

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    Ruby Ann Almazan Matutino
    27 views2 pages
    Factor analysis is a statistical technique used to investigate relationships between complex concepts that cannot be directly measured by collapsing many variables into underlying factors. It assumes that multiple observed variables correlate because they are associated with a common latent variable. For example, income, education, and occupation may correlate because they are related to socioeconomic status. Factors are ordered by how much of the total variance they explain. The eigenvalue indicates how much variance a factor explains, with higher eigenvalues explaining more variance. Factor loadings express the strength of the relationship between each variable and the underlying factor, similar to a correlation coefficient, and are used to interpret the meaning of the factors.

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    RUBY ANN A. MATUTINO-factorial analysis

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    Factor analysis is a statistical technique used to investigate relationships between complex concepts that cannot be directly measured by collapsing many variables into underlying factors. It assumes that multiple observed variables correlate because they are associated with a common latent variable. For example, income, education, and occupation may correlate because they are related to socioeconomic status. Factors are ordered by how much of the total variance they explain. The eigenvalue indicates how much variance a factor explains, with higher eigenvalues explaining more variance. Factor loadings express the strength of the relationship between each variable and the underlying factor, similar to a correlation coefficient, and are used to interpret the meaning of the factors.

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    27 views2 pages

    RUBY ANN A. MATUTINO-factorial Analysis

    Uploaded by

    Ruby Ann Almazan Matutino
    Factor analysis is a statistical technique used to investigate relationships between complex concepts that cannot be directly measured by collapsing many variables into underlying factors. It assumes that multiple observed variables correlate because they are associated with a common latent variable. For example, income, education, and occupation may correlate because they are related to socioeconomic status. Factors are ordered by how much of the total variance they explain. The eigenvalue indicates how much variance a factor explains, with higher eigenvalues explaining more variance. Factor loadings express the strength of the relationship between each variable and the underlying factor, similar to a correlation coefficient, and are used to interpret the meaning of the factors.

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    FACTORIAL ANALYSIS

    Why use factor analysis?


    Factor analysis is a useful tool for investigating variable relationships for complex
    concepts such as socioeconomic status, dietary patterns, or psychological scales.

    It allows researchers to investigate concepts that are not easily measured directly by
    collapsing a large number of variables into a few interpretable underlying factors.

    What is a factor?
    The key concept of factor analysis is that multiple observed variables have similar
    patterns of responses because they are all associated with a latent (i.e. not directly
    measured) variable.

    For example, people may respond similarly to questions about income, education, and
    occupation, which are all associated with the latent variable socioeconomic status.

    In every factor analysis, there are the same number of factors as there are variables. 
    Each factor captures a certain amount of the overall variance in the observed variables,
    and the factors are always listed in order of how much variation they explain.

    The eigenvalue is a measure of how much of the variance of the observed variables a
    factor explains.  Any factor with an eigenvalue ≥1 explains more variance than a single
    observed variable.

    So if the factor for socioeconomic status had an eigenvalue of 2.3 it would explain as
    much variance as 2.3 of the three variables.  This factor, which captures most of the
    variance in those three variables, could then be used in other analyses.
    The factors that explain the least amount of variance are generally discarded.  Deciding
    how many factors are useful to retain will be the subject of another post.

    What are factor loadings?


    The relationship of each variable to the underlying factor is expressed by the so-called
    factor loading. Here is an example of the output of a simple factor analysis looking at
    indicators of wealth, with just six variables and two resulting factors.

    Variables Factor 1 Factor 2


    Income 0.65 0.11
    Education 0.59 0.25
    Occupation 0.48 0.19
    House value 0.38 0.60
    Number of public parks in neighborhood 0.13 0.57
    Number of violent crimes per year in 0.23 0.55
    neighborhood
     
    The variable with the strongest association to the underlying latent variable. Factor 1, is
    income, with a factor loading of 0.65.

    Since factor loadings can be interpreted like standardized regression coefficients, one


    could also say that the variable income has a correlation of 0.65 with Factor 1. This would
    be considered a strong association for a factor analysis in most research fields.
    Two other variables, education and occupation, are also associated with Factor 1. Based
    on the variables loading highly onto Factor 1, we could call it “Individual socioeconomic
    status.”

    House value, number of public parks, and number of violent crimes per year, however,
    have high factor loadings on the other factor, Factor 2. They seem to indicate the overall
    wealth within the neighborhood, so we may want to call Factor 2 “Neighborhood
    socioeconomic status.”

    Notice that the variable house value also is marginally important in Factor 1 (loading =
    0.38). This makes sense, since the value of a person’s house should be associated with his
    or her income.

    Submitted By:
    RUBY ANN A. MATUTINO
    MED – MATHEMATICS

    Submitted To:
    ENGR. FELIX MANAOAT
    PROFESSOR

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