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# Factor Analysis

Presented by

## Dr. Maher Khelifa

Associate Professor
Department of Humanities and Social Sciences
College of Arts and Sciences

Understanding Factor Analysis
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##  This workshop discusses factor analysis as an

exploratory and confirmatory multivariate
technique.

Understanding Factor Analysis
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##  Factor analysis is commonly used in:

 Data reduction

 Scale development

##  The assessment of the dimensionality of a set of variables.

Understanding Factor Analysis
4

##  Regardless of purpose, factor analysis is used in:

 the determination of a small number of factors based on a
particular number of inter-related quantitative variables.

##  Unlike variables directly measured such as speed,

height, weight, etc., some variables such as egoism,
creativity, happiness, religiosity, comfort are not a
single measurable entity.

##  They are constructs that are derived from the

measurement of other, directly observable variables .

Understanding Factor Analysis
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##  Constructs are usually defined as unobservable latent variables. E.g.:

 motivation/love/hate/care/altruism/anxiety/worry/stress/product
quality/physical aptitude/democracy /reliability/power.

##  Example: the construct of teaching effectiveness. Several variables

are used to allow the measurement of such construct (usually several
scale items are used) because the construct may include several
dimensions.

##  Factor analysis measures not directly observable constructs by

measuring several of its underlying dimensions.

##  The identification of such underlying dimensions (factors) simplifies

the understanding and description of complex constructs.

Understanding Factor Analysis
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##  Generally, the number of factors is much smaller than the

number of measures.

measures.

##  From this angle, factor analysis is viewed as a data-

reduction technique as it reduces a large number of
overlapping variables to a smaller set of factors that reflect
construct(s) or different dimensions of contruct(s).

Understanding Factor Analysis
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##  The assumption of factor analysis is that underlying

dimensions (factors) can be used to explain complex
phenomena.

##  Observed correlations between variables result from

their sharing of factors.

##  Example: Correlations between a person’s test scores

might be linked to shared factors such as general
intelligence, critical thinking and reasoning skills,

Ingredients of a Good Factor Analysis Solution
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##  A major goal of factor analysis is to represent

relationships among sets of variables parsimoniously
yet keeping factors meaningful.

interpretable.

##  When factors can be interpreted, new insights are

possible.

Application of Factor Analysis
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##  This workshop will examine three common

applications of factor analysis:
 Defining indicators of constructs
 Defining dimensions for an existing measure
 Selecting items or scales to be included in a measure.

Application of Factor Analysis
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##  Ideally 4 or more measures should be chosen to represent each

construct of interest.

##  The choice of measures should, as much as possible, be guided by

theory, previous research, and logic.

Application of Factor Analysis
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##  Defining dimensions for an existing measure:

 In this case the variables to be analyzed are chosen by the
initial researcher and not the person conducting the analysis.
 Factor analysis is performed on a predetermined set of
items/scales.
 Results of factor analysis may not always be satisfactory:
 The items or scales may be poor indicators of the construct or
constructs.
 There may be too few items or scales to represent each underlying
dimension.

Application of Factor Analysis
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##  Selecting items or scales to be included in a measure.

 Factor analysis may be conducted to determine what items or
scales should be included and excluded from a measure.
 Results of the analysis should not be used alone in making
decisions of inclusions or exclusions. Decisions should be
taken in conjunction with the theory and what is known about
the construct(s) that the items or scales assess.

Steps in Factor Analysis
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##  Factor analysis usually proceeds in four steps:

 1st Step: the correlation matrix for all variables is computed

##  4th Step: Make final decisions about the number of underlying

factors

Steps in Factor Analysis:
The Correlation Matrix
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##  1st Step: the correlation matrix

 Generate a correlation matrix for all variables

##  If the correlation between variables are small, it is unlikely that

they share common factors (variables must be related to each
other for the factor model to be appropriate).
 Think of correlations in absolute value.

##  Correlation coefficients greater than 0.3 in absolute value are

indicative of acceptable correlations.
 Examine visually the appropriateness of the factor model.

Steps in Factor Analysis:
The Correlation Matrix
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##  Bartlett Test of Sphericity:

 used to test the hypothesis the correlation matrix is an identity matrix
(all diagonal terms are 1 and all off-diagonal terms are 0).

 If the value of the test statistic for sphericity is large and the
associated significance level is small, it is unlikely that the
population correlation matrix is an identity.

##  If the hypothesis that the population correlation matrix is an identity

cannot be rejected because the observed significance level is large,
the use of the factor model should be reconsidered.

Steps in Factor Analysis:
The Correlation Matrix
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##  The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy:

 is an index for comparing the magnitude of the observed correlation
coefficients to the magnitude of the partial correlation coefficients.

##  The closer the KMO measure to 1 indicate a sizeable sampling adequacy

(.8 and higher are great, .7 is acceptable, .6 is mediocre, less than .5 is
unaccaptable ).

 Reasonably large values are needed for a good factor analysis. Small KMO
values indicate that a factor analysis of the variables may not be a good
idea.

Steps in Factor Analysis:
Factor Extraction
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##  2nd Step: Factor extraction

 The primary objective of this stage is to determine the factors.
 Initial decisions can be made here about the number of factors
underlying a set of measured variables.
 Estimates of initial factors are obtained using Principal components
analysis.
 The principal components analysis is the most commonly used
extraction method . Other factor extraction methods include:
 Maximum likelihood method
 Principal axis factoring
 Alpha method
 Unweighted lease squares method
 Generalized least square method
 Image factoring.

Steps in Factor Analysis:
Factor Extraction
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##  In principal components analysis, linear combinations of

the observed variables are formed.

##  The 1st principal component is the combination that accounts

for the largest amount of variance in the sample (1st
extracted factor).

##  The 2nd principle component accounts for the next largest

amount of variance and is uncorrelated with the first (2nd
extracted factor).

##  Successive components explain progressively smaller portions

of the total sample variance, and all are uncorrelated with
each other.

Steps in Factor Analysis:
Factor Extraction
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 To decide on how many factors we
need to represent the data, we use
2 statistical criteria: Total Variance Explained

##  Eigen Values, and Extraction Sums of Squared

Comp % of Cumulativ % of Cumulativ
onent Total Variance e% Total Variance e%
 The determination of the number 1 3.046 30.465 30.465 3.046 30.465 30.465

## of factors is usually done by 2 1.801 18.011 48.476 1.801 18.011 48.476

considering only factors with 3 1.009 10.091 58.566 1.009 10.091 58.566

## Eigen values greater than 1. 4 .934 9.336 67.902

5 .840 8.404 76.307
6 .711 7.107 83.414
 Factors with a variance less than 1 7 .574 5.737 89.151
are no better than a single 8 .440 4.396 93.547
variable, since each variable is 9 .337 3.368 96.915
expected to have a variance of 1. 10 .308 3.085 100.000
Extraction Method: Principal Component Analysis.

Steps in Factor Analysis:
Factor Extraction
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##  The examination of the Scree plot provides a

visual of the total variance associated with
each factor.

##  The gradual trailing off (scree) shows the rest

of the factors usually lower than an Eigen
value of 1.

##  In choosing the number of factors, in addition

to the statistical criteria, one should make
initial decisions based on conceptual and
theoretical grounds.

##  At this stage, the decision about the number of

factors is not final.

Steps in Factor Analysis:
Factor Extraction
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Component Matrix using Principle Component Analysis
Component Matrixa

Component

1 2 3
I discussed my frustrations and feelings with person(s) in school .771 -.271 .121

I tried to develop a step-by-step plan of action to remedy the problems .545 .530 .264

## I expressed my emotions to my family and close friends .580 -.311 .265

I read, attended workshops, or sought someother educational approach to correct the .398 .356 -.374
problem

I tried to be emotionally honest with my self about the problems .436 .441 -.368

I sought advice from others on how I should solve the problems .705 -.362 .117

## I explored the emotions caused by the problems .594 .184 -.537

I took direct action to try to correct the problems .074 .640 .443

I told someone I could trust about how I felt about the problems .752 -.351 .081

I put aside other activities so that I could work to solve the problems .225 .576 .272

## Extraction Method: Principal Component Analysis.

a. 3 components extracted.

Steps in Factor Analysis:
Factor Rotation
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##  3rd Step: Factor rotation.

 In this step, factors are rotated.

##  Un-rotated factors are typically not very interpretable

(most factors are correlated with may variables).

##  Factors are rotated to make them more meaningful and

easier to interpret (each variable is associated with a
minimal number of factors).

##  Different rotation methods may result in the

identification of somewhat different factors.

Steps in Factor Analysis:
Factor Rotation
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##  Varimax use orthogonal rotations yielding uncorrelated

factors/components.

##  Varimax attempts to minimize the number of variables that have high

Steps in Factor Analysis:
Factor Rotation
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##  Other common rotational method used include Oblique rotations

which yield correlated factors.

 Oblique rotations are less frequently used because their results are
more difficult to summarize.

##  Other rotational methods include:

 Quartimax (Orthogonal)
 Equamax (Orthogonal)
 Promax (oblique)

Steps in Factor Analysis:
Factor Rotation
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 A factor is interpreted or named by examining the largest values linking the
factor to the measured variables in the rotated factor matrix.
Rotated Component Matrixa

Component

1 2 3
I discussed my frustrations and feelings with person(s) in school .803 .186 .050

I tried to develop a step-by-step plan of action to remedy the problems .270 .304 .694

## I expressed my emotions to my family and close friends .706 -.036 .059

I read, attended workshops, or sought someother educational approach to .050 .633 .145
correct the problem

I tried to be emotionally honest with my self about the problems .042 .685 .222

I sought advice from others on how I should solve the problems .792 .117 -.038

## I explored the emotions caused by the problems .248 .782 -.037

I took direct action to try to correct the problems -.120 -.023 .772

I told someone I could trust about how I felt about the problems .815 .172 -.040

I put aside other activities so that I could work to solve the problems -.014 .155 .657

## Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

## © Dr. Maher Khelifa a. Rotation converged in 5 iterations.

Steps in Factor Analysis:
Making Final Decisions
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##  4th Step: Making final decisions

 The final decision about the number of factors to choose is the number of
factors for the rotated solution that is most interpretable.
 To identify factors, group variables that have large loadings for the same
factor.
 Interpret factors according to the meaning of the variables

##  This decision should be guided by:

 A priori conceptual beliefs about the number of factors from past research or
theory
 Eigen values computed in step 2.
 The relative interpretability of rotated solutions computed in step 3.

Assumptions Underlying Factor Analysis
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##  Assumption underlying factor analysis include.

 The measured variables are linearly related to the factors + errors.
 This assumption is likely to be violated if items limited response scales
(two-point response scale like True/False, Right/Wrong items).
 The data should have a bi-variate normal distribution for each pair of
variables.
 Observations are independent.
 The factor analysis model assumes that variables are determined by
common factors and unique factors. All unique factors are assumed
to be uncorrelated with each other and with the common factors.

Obtaining a Factor Analysis
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 Click:
 Analyze and
select
 Dimension
Reduction
 Factor
 A factor
Analysis Box
will appear

Obtaining a Factor Analysis
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 Move
variables/scale
items to
Variable box

Obtaining a Factor Analysis
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 Factor
extraction
 When
variables
are in
variable
box,
select:
 Extractio
n

Obtaining a Factor Analysis
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extraction Box
appears, select:
 Scree Plot

##  keep all default

selections
including:
 Principle component
Analysis
 Based on Eigen Value
of 1, and
 Un-rotated factor
solution

Obtaining a Factor Analysis
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 During
factor
extraction
keep
factor
rotation
default of:
 None
 Press
continue

Obtaining a Factor Analysis
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 During Factor
Rotation:
 Decide on the
number of factors
based on actor
extraction phase
and enter the
desired number of
factors by choosing:
 Fixed number of
factors and
entering the
desired number of
factors to extract.
 Under Rotation
Choose Varimax
 Press continue
 Then OK

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