Analysis of interdependence

Question 1

What is exploratory factor analysis?

Answer 1

A technique used to reduce many variables into fewer underlying factors by identifying common dimensions among variables

Question 2

What are factor loadings?

Answer 2

Correlations between original variables and each factor, indicating the importance of each variable in defining a factor

Question 3

What are eigenvalues in factor analysis?

Answer 3

They represent the amount of variance captured by each factor; typically, factors with eigenvalues greater than 1 are kept

Question 4

What does the total variance explained tell you in factor analysis?

Answer 4

• The percentage of variance in orginal variables explained by each factor

Question 5

What are the communalities in factor analysis?

Answer 5

The sum of squared factor loadings for each variable, indicating how much a variables variance is captured by all factors combined

Question 6

What is cluster analysis used for?

Answer 6

Classifying individuals or objects into groups based on similarity to help with tasks like market segmentation