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Factor Analysis
• Questions –
1. The price of the car should be reasonable
2. Mileage should be at least 17 Kms / lt
3. A small car is easy to maintain & Service
4. Seating should be comfortable for four adults
5. It should have adequate leg space and head room.
6. Brakes are the most critical part of car.
7. Collapsible steering column should be standard feature
8. Power steering is must
9. Interior accessories should be attractive
10. Adequate space for luggage. 5
Factor Analysis - SPSS
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Factor Analysis – SPSS Input
• Import the data from Excel Sheet
• Analyze – Data Reduction – Factor
• Select all variables on left side & transfer on rt side
variable box using right arrow
• Click ‘Extraction’ –
– Select ‘Principal Components’ as method
– Under ‘Display’ – select ‘Unrotated Factor Solution’
– Under ‘Extract’ – select ‘Eigen Value over 1’
– Under ‘Analyze’ – choose ‘Correlation Matrix’
– Click ‘Continue’
• Click ‘Rotation’ – select ‘VARIMAX’ from options under
‘Method’ – click ‘Continue’
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• Click ‘Ok’ to get Factor Analysis output
Factor Analysis – SPSS Output
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Factor Analysis - SPSS
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Factor Analysis - SPSS
• Interpretation –
• 3 Factors –Eigen value more than 1- Cumulative Variance –
82. 154% explained ( Information contained in 10 variables)
• ‘Communality’ is the proportion of variance in any one of
the original variable which is captured by the extracted
factors. e.g. for Var 1 – 0. 941 is captured by 3 extracted
factors, 0.969 for Var 2 & so on.
• So also, any variable should load close to 1 on one Factor &
close to 0 on remaining. If this is not the case, it indicates
that either the sample of respondents has more than one
opinion about the variable or the question / variable may not
be clear in it’s phrasing.
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Factor Analysis - SPSS
• Interpretation –
• Loading of 1,2,3 & 10 on Factor 1 – i.e Factor 1 is
combination of 4 – Can be named as ‘Economy’
• Loading of 4 & 5 on Factor 2 – i.e. Factor 2 is combination
of 2 – can be named as ‘Spaciousness’
• Loading of 6 & 7 on Factor 3 – i.e. Factor 3 is combination
of 2 – can be named as ‘Safety’
• 8 & 9 could be independent – should be further investigated
Another question is ‘What should be considered as high
loading?’
There is no clear cut guideline & thies should be looked
into wrt ‘Relativity’ concept & with left to researcher’s
expertise. 11
Factor Analysis - SPSS
• Ex. 2 – Twenty 2 Wheeler Owners were surveyed
about their perceptions & image attributes of the
vehicles they owned . Ten Questions were asked to
each of them, all answered on a scale of 1 to 7 ( 1 =
Completely Agree & 7 = Completely Disagree).
• 1 – I use 2 Wheeler because it is affordable
• 2 – It gives me sense of freedom to own a 2 Wheeler
• 3 – Low Maintenance cost makes a 2 Wheeler very
economical in long run.
• 4 – A 2 Wheeler is essentially a male dominated
vehicle 12
Factor Analysis - SPSS
• 5 - I feel very powerful when I am on my 2 Wheeler
• 6 – Some of my friends who do not have their own
vehicle are jealous of me
• 7 – I feel good whenever I see the Ad of my 2
Wheeler on TV, in a magazine or on a hoarding
• 8 – My vehicle gives me a comfortable ride
• 9 – I think 2 Wheeler are a safe way to travel
• 10 – Three people should be legally allowed to
travel on 2 Wheeler
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Factor Analysis - SPSS
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Factor Analysis - SPSS
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Factor Analysis - SPSS
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Factor Analysis - SPSS
• Interpretation –
• Loading of 4,5,6 & 7 on Factor 1 – i.e Factor 1 is
combination of 4 – Can be named as ‘Pride of Ownership’
• Loading of 8 & 9 on Factor 2 – i.e. Factor 2 is combination
of 2 – can be named as ‘Utility’ So also Var 3 has a high
loading on Factor 2 in Unrotated Factor Matrix. This also
may be included based on Researcher’s choice.
• Loading of 1 & 10 on Factor 3 – i.e. Factor 3 is combination
of 2 – can be named as ‘Economy’
• 2 could be independent – should be further investigated
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Factor Analysis - SPSS
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