Journal of Data Analysis

Vol.x, No.x, Month 201x, p. xx-xx

FACTOR ANALYSIS AND ITS APPLICATION IN

IDENTIFYING FACTORS AFFECTING POVERTY ON
THE ISLAND OF SUMATRA IN 2022
Ona Destiana
Department of Statistics, Syiah Kuala University, Banda Aceh, Indonesia.
E-mail: destiana@mhs.unsyiah.ac.id

Abstrak InformasiArtikel
Kemiskinan merupakan suatu kondisi dimana seseorang atau Sejarah Artikel:
kelompok masyarakat tidak memiliki cukup sumber daya Diajukan May 10, 201x
ekonomi untuk memenuhi kebutuhan dasar hidupnya. Diterima Aug 26, 201x
Pembangunan suatu negara sangat berhubungan dengan tingkat Kata Kunci:
kemiskinan. Penelitian ini bertujuan untuk mengetahui penerapan Kemiskinan
analisis faktor terhadap kemiskinan di Pulau Sumatera. Data yang Analisis Faktor
digunakan dalam penelitian ini adalah data indikator- indikator Indikator
sebanyak 12 indikator sebagai pembentuk kemiskinan pada
seluruh kabupaten/kota di Pulau Sumatera tahun 2022. Hasil
penelitian menunjukkan bahwa terdapat empat faktor utama yang
terbentuk yaitu faktor pertama (faktor ekonomi) terdiri dari
persentase penduduk miskin menurut status bekerja di sektor
formal, persentase penduduk miskin menurut status bekerja di
sektor non pertanian dan persentase, persentase pengeluaran
perkapita untuk makanan, dan tingkat pengangguran terbuka.
Faktor kedua yaitu faktor kesehatan terdiri perempuan pernah
kawin yang berusia 15-49 tahun yang proses kelahiran
terakhirnya ditolong oleh tenaga kesehatan terlatih dan angka
harapan hidup. Faktor ketiga yaitu faktor fasilitas perumahan
terdiri dari persentase rumah tangga miskin yang menggunakan
air jamban sendiri/bersama dan persentase rumah tangga miskin
yang menggunakan air layak. Faktor keempat yaitu faktor
pendidikan terdiri dari rata-rata lama sekolah.

Abstract
Poverty is a condition in which a person or group of people do not Keyword:
have sufficient economic resources to meet their basic needs. The Poverty
development of a country is closely related to the poverty rate. Factor Analysis
This study aims to determine the application of factor analysis to Indicators
poverty in the island of Sumatra. The data used in this study are
data on poverty indicators in all districts/cities in the island of
Sumatra in 2022. The results show that there are four main factors
formed, namely the first factor (economic factor) which consist of
percentage of poor people according to working status in the
formal sector, the percentage of poor people according to their
working status in the non- agricultural sector, and the percentage
of capita expenditure on food, and the level of open germination.
The second factor, namely the health factor, consists of previously
married women aged 15-49 years whose last birth was assisted by
Journal of Data Analysis
Vol.x, No.x, Month 201x, p. xx-xx

trained health workers and life expectancy. The third factor,

namely the housing facilities, consist of the percentage of poor
households that use their own/shared toilet water and the
percentage of poor households that use improved water. The
fourth factor, namely the education factor consists of the average
number of years of schooling.

1. Introduction
Poverty is a phenomenon that occurs in almost all developing countries. Poverty can be
defined as the inability of community groups to fulfill their basic needs. Poverty can result in a
person having limited access to the resources and opportunities needed to achieve a decent
standard of living. In addition, poverty can be an obstacle to a country's economic and social
development. Indonesia, as a developing country with the fourth largest population in the world,
still lives in conditions of poverty. For this reason, it is necessary to carry out an in-depth study
of the factors that form poverty so that it can help the government in taking the policies needed
to reduce poverty levels. Sumatra Island is the third largest island in Indonesia and is also one of
the islands with the most provinces in Indonesia.
Sumatra Island has extraordinary natural resources with different geographical conditions.
Different potential resources between regions are the basis for regional inequality which can affect
the level of community welfare between regions. One of the provinces that has a high poverty
rate in Indonesia is on the island of Sumatra, namely Aceh Province at 15.92%.
This research aims to carry out factor analysis on poverty data to form factors containing
variables that cause poverty so that the main factors that influence poverty can be observed in all
districts/cities on the island of Sumatra in 2022.

2. Literature Review
2.1. Poverty
Poverty is seen as an economic inability to meet basic food and non-food needs as measured
by expenditure (BPS 2016). Poverty is influenced by various factors, such as income, education,
location, gender, and environmental conditions. The factors causing poverty can vary between
regions and countries, but some common factors that are often identified involve economic,
social, and cultural aspects such as lack of education, gender equality, lack of employment
opportunities, economic instability, and unequal access to resources.

2.2 Factor Analysis

Factor analysis is a general name denoting a class of procedures, primarily used to discover
relationships (interrelationships) between a number of variables that are independent of each
other, so that the data is reduced or summarized, from many variables changed to fewer variables
than the initial number of variables. In other words, factor analysis is assessing which variables
are considered appropriate (appropriateness) for inclusion in subsequent analyses. Factor analysis
is a procedure for identifying items or variables based on their similarities. This similarity is
shown by the correlation value tall. Items that have a high correlation will form a cluster of
factors. The basic principle in factor analysis is to simplify the description of data by reducing
the number of variables/dimensions.

2.3. Kaiser-Meyer-Olkin (KMO)

KMO(Kaiser-Meyer-Olkin) is a measure used in factor analysis to evaluate the suitability of
the data used in the analysis. KMO is used to assess the extent to which the data held is suitable
for analysis using factor analysis. The KMO value is said to be quite good if it is above 0.5.
Journal of Data Analysis
Vol.x, No.x, Month 201x, p. xx-xx

2.4. Measure of Sampling Adequacy (MSA)

Measure of Sampling Adequacy (MSA) is a process carried out to ensure the reliability of
the measuring instruments used to measure certain variables or attributes so that they can produce
consistent and accurate data. This process also measures sample adequacy with criteria greater
than 0.5.

2.5. Eigen values

Eigen values is the amount of variance explained by each factor that is more than 1. The
higher the eigenvalue of a factor, the more variance that can be explained by that factor.

2.6. Factor loading

Factor loading is a coefficient that measures how well a variable is associated with a
particular factor in factor analysis. In the context of factor analysis, factor loading is the
correlation value between observed variables and factors produced by factor analysis

3. Methods
3.1. Data source
This research uses secondary data about poverty-forming indicators obtained from the
bps.go.id website. The data used in this research is data from all districts/cities on the island of
Sumatra, totaling 154 districts/cities in 2022. Determining the sample size in factor analysis must
meet at least four or five times the number of variables being analyzed. In this study, there are 12
variables that will be analyzed: Percentage of Poor Population According to Working Status in
the Formal Sector, Percentage of Poor Population According to Working Status in the Non-
Agricultural Sector, Percentage of Expenditure per Capita for Food, Average Years of Schooling,
Literacy Rate, School Enrollment Rate , Percentage of Poor Households Using Improper Water,
Percentage of Poor Households Using Own/Shared Toilet Water, Percentage of Ever-Married
Women Aged 15-49 Years Whose Final Birth Process Was Assisted by Trained Health Personnel,
Percentage of Poor Households Receiving Government Assistance, Life Expectancy, and Open
Unemployment Rate.

3.2. Data Analysis Procedures

The analysis steps carried out in this research are:
1. Entering data
2. Carry out data processing using the RStudio application
3. Calculate the correlation matrix of the values Bartlett's test of sphericity and Kaiser-Meyer
Olkin (KMO) to determine data adequacy where the KMO value that meets is greater
than 0.5
4. Determine the variables that are suitable for factor analysis by referring to the MSA value
≥ 0.5
5. Form a correlation matrix consisting of variables (n) and amount of data (p) with size
(n×p)
6. Extract using the main components (Principal Component Analysis) which consists of
determining the number of factors and the contribution of factors to the overall data
7. Test the adequacy of the number of factors
8. Perform factor rotation
9. Name the factors

4. Results and Discussion

4.1. Analysis Feasibility Test
The analysis feasibility test was carried out to determine and ensure that the data used could
be analyzed using factor analysis. This analysis consists of the KMO (Kaiser-Meyer-Olkin) and
Journal of Data Analysis
Vol.x, No.x, Month 201x, p. xx-xx

MSA (Measure of Sampling Adequacy). Based on the results of the analysis carried out, the KMO
value was 0.77. This shows that the KMO value is between 0.5 to 1 so that all variables can be
used in factor analysis. The processing results for the MSA value show that there are two variables
that have an MSA value below 0.5 so these two variables are deleted and re-analyzed.
Table 1. MSA test results after variable deletion

X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12

First
0.84 0.85 0.88 0.82 - 0.34 0.89 0.84 0.68 - 0.68 0.89
Analysis
Second
0.84 0.84 0.88 0.85 - - 0.90 0.85 0.69 - 0.69 0.88
Analysis
It can be seen in Table 1 that after removing variables X5 and X10, there are still variables
with KMO values below 0.5, namely variable In the results of the second analysis, all variables
met a KMO value of greater than 0.5 so that the nine variables could be continued in factor
analysis.

4.2. Bartlett Sphericity Test

Bartlett's sphericity a test used to find out whether there is a significant correlation between
variables. Based on the results of the analysis, it was found that the significance value Bartlett's
sphericity of 2.2 x 10-16 or smaller than alpha so it can be concluded that there is a significant
correlation between the variables in the data.

4.3. Displays the Correlation Matrix

The correlation matrix displays the correlation coefficient values between variables.
Variables that have a high correlation with other variables will be on the same dimension. Based
on Table 2, it can be seen that all variables have a fairly high correlation so that the analysis is
feasible to continue using the existing variables.
Table 2. Correlation matrix between variables
X1 X2 X3 X4 X7 X8 X9 X11 X12
X1 1.00 0.70 -0.40 0.43 0.41 0.44 0.39 0.38 0.54
X2 0.70 1.00 -0.45 0.68 0.49 0.44 0.48 0.47 0.61
X3 -0.40 -0.45 1.00 -0.30 -0.27 -0.47 -0.38 -0.38 -0.33
X4 0.43 0.68 -0.30 1.00 0.47 0.34 0.50 0.49 0.56
X7 0.41 0.49 -0.27 0.47 1.00 0.45 0.35 0.35 0.38
X8 0.44 0.44 -0.47 0.34 0.45 1.00 0.48 0.48 0.21
X9 0.39 0.48 -0.38 0.50 0.35 0.48 1.00 1.00 0.40
X11 0.38 0.47 -0.38 0.49 0.35 0.48 1.00 1.00 0.39
X12 0.54 0.61 -0.33 0.56 0.38 0.21 0.40 0.39 1.00

4.4. Performing Extraction

4.4.1.Eigen values
The extraction process uses principal component analysis. The purpose of extraction is to get a
smaller number of variables than the initial number of variables into several new factors and
factor contributions to the overall data.
Table 3. Eigen values and total variance explained
Factor Eigen Value Total Variance Explained
Factor 1 573.15 0.6135
Factor 2 180.34 0.1930
Factor 3 126.20 0.1351
Factor 4 31.24 0.0334
Factor 5 11.66 0.0125
Journal of Data Analysis
Vol.x, No.x, Month 201x, p. xx-xx

Factor 6 7.72 0.083

Factor 7 3.08 0.0033
Factor 8 0.77 0.0008
Factor 9 0.02 0.0000
Table 3 shows that there are seven main factors that have eigen values greater than 1 with
each having eigenvalues, namely 573.1503, 180.3476, 126.2087, 31.2466, 11.6601, 7.7285, and
3.0887.
4.4.2. Total Variance Explained
Based on Table 3, it is known that factor one produces a value of 0.6135, which indicates
that factor one can explain 61.35% of the data diversity. Factor two produces a value of 0.1930,
which shows that factor two can explain 19.30% of the data diversity. Factor three produces a
value of 0.1351 which shows that factor two can explain 13.51% of the data diversity. Factor four
produces a value of 0.0334, which shows that factor four can explain the variation in data of
3.34%, as well as other factors.

4.5. Adequacy Test of the Number of Factors

The factor feasibility test is carried out to determine the most optimal number of factors that
represent the variables. This test uses statistics chi square with the hypothesis Ho being the
number of factors fulfilled. From data analysis, the significance value for the four main factors is
0.107, which is greater than 0.05, so it can be concluded that the optimal number of factors to be
used in factor analysis is four factors.

4.6. Performing Factor Rotation

The purpose of factor rotation is to distribute the variables into the factors formed. By
rotating the factors, it will make it easier to interpret the variables that fall into certain factors.
Using four main factors, factor determination is seen from the value factor loading largest of each
variable.
Table 4. Loading factors value
Factor 1 Factor 2 Factor 3 Factor 4
X1 0.77 0.144 0.264
X2 0.74 0.209 0.228 0.379
X3 -0.379 -0.218 -0.358
X4 0.355 0.239 0.134 0.891
X7 0.328 0.157 0.358 0.296
X8 0.188 0.232 0.946 0.105
X9 0.228 0.929 0.217 0.185
X11 0.225 0.933 0.211 0.173
X12 0.612 0.21 0.323
From Table 4 it can be seen that factor 1 has the largest loading value for variables X1, X2,
X3, and X12. Factor 2 has the largest loading value for variables X9 and X11 (life expectancy).
Factor 3 has the largest loading value for variables X8 and X7. Factor 4 has the largest loading
value for variable X4.

4.7. Providing Factor Naming

After getting the factors that are formed and the variables that are included in certain
factors, then next do the naming (labelling) on the factors formed. Names are given based on
the similarities in the characteristics that are part of the factor. The variables and naming of the
factors formed can be seen in Table 5 below.
Journal of Data Analysis
Vol.x, No.x, Month 201x, p. xx-xx

Table 5. Factor Naming

Factor Indicator Variable Label
Percentage of poor people according to working
X1 status in the sector formal.

Percentage of poor people according to working

Factor 1 Economy
X2 status in the sector non-agricultural

X3 Percentage of expenditure per capita for food

X12 Open unemployment rate
Percentage of ever-married women aged 15-49
X9 years Her final birth process was assisted by
medical personnel Health
Factor 2
Life expectancy
X11
Percentage of poor households using latrine
water alone/together).
X8
Factor 3
Percentage of poor households who use decent House Facility
X7 water
Factor 4 X4 Average length of school Education

5. Conclusion
Based on the results of the analysis carried out, the following conclusions were obtained:
1. There were 9 variables used in the factor analysis of the 12 initial variables, namely Percentage
of Poor Population According to Working Status in the Formal Sector, Percentage of Poor
Population According to Working Status in the Non-Agricultural Sector, Percentage of
Expenditures per Capita for Food, Average years of schooling, Percentage of Poor Households
Using Improved Water, Percentage of Poor Households Using Own/Shared Toilet Water,
Percentage of Ever Married Women Aged 15-49 Years Whose Final Birth Process Was
Assisted by Trained Health Personnel, Life Expectancy, and Open Unemployment Rate
2. Factors influencing poverty on the island of Sumatra in 2022 can be seen from the four main
factors formed from factor analysis, namely economic factors, health, housing facilities and
education

6. Advise
Suggestions for the author are to use more variables so that they can describe poverty and help in
forming more accurate and efficient factors.

References
Hair, J.F., Black, W.C., Babin, B.J., and Anderson, R.E. (2014). Multivariate Data Analysis
Seventh Edition. Upper Saddle River: Pearson Education.
Manurung, A.H. (2015). Analisis Faktor-Faktor yang Mempengaruhi Kemiskinan di Provinsi
Aceh. Jurnal Ekonomi dan Pembangunan, 23(1), 45-58.
Johnson, Richard A & Wichern, Dean W. (2007). Applied Multivariate Statistical Analysis Sixth
Edition. London: Pearson Education.
Journal of Data Analysis
Vol.x, No.x, Month 201x, p. xx-xx

Dwipurwani. (2009). Penerapan Analisis Faktor dalam Membentuk Faktor Laten yang
Mempengaruhi Prestasi Mahasiswa di Jurusan Matematika FMIPA Universitas
Sriwijaya. Jurnal Penelitian Sains (JPS). 12 (3 (A)), 12301-12305
Utami, H. W., & Masjkuri, S. U. (2018). Pengaruh Pertumbuhan Ekonomi, Upah Minimum,
Tingkat Pengangguran Terbuka Dan Pendidikan Terhadap Jumlah Penduduk Miskin.
Jurnal Ekonomi Dan Bisnis Airlangga, 4(01), 11–20.