Chapter 14 Factor Analysis

Example 1

An investigator has asked each respondent in a survey whether he or she strongly agrees, agrees, is undecided, disagrees, or strongly disagrees with 15 statements concerning attitudes toward inflation.

As a first step, the investigator will do a factor analysis on the resulting data to determine which statements belong together in sets that are uncorrelated with other sets.

The particular statements that form a single set will be examined to obtain a better understanding of attitudes toward inflation. Scores derived from each set or factor will be used in subsequent analysis to predict consumer spending.

Example 2

There are Fifty test questions

• Each is a function of 3 factors:
• Verbal, quantitative, analytical skills

You are interested in measuring the gain in analytical skills over the course of a week after doing some task.