Factor analysis example

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# Factor analysis example - PowerPoint PPT Presentation

Factor analysis example . Where regression can go wrong. An example: A financial company what was most important to respective/potential clients:

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Presentation Transcript

### Factor analysis example

Where regression can go wrong
• An example:
• A financial company what was most important to respective/potential clients:

9C Now I am going to read out a number of products and services that other people have said are important to them in their ideal trustee services organisation. I would like you to rate how important each one is to you on a scale of 1 to 10 where 1 means "not at all important" and 10 means "extremely important". So, how important to you is .....................................?

READ EACH ATTRIBUTE. RECORD ONE RESPONSE ONLY FOR EACH ATTRIBUTE

Provide a one stop shop covering all your financial needs like mortgages and investments, as well as wills, trusts and power of attorney

Have your product details accessible by computer

Have branches or offices you can visit

Have simple and easy to understand products

Are available by phone outside normal business hours

Have a dedicated service person for you to deal with

Conduct regular, scheduled reviews of your products and services with them

Provide mix and match options that can be tailored to your changing needs

Example 2 factors
• Let’s perform a factor analysis on this data to see how people’s needs tend to associate and if they are meaningful
• Code

proc factor data = service nfactor =2 fuzz=.4 rotate=varimax;

var Q56a1-Q56a9;

run;

proc factor data = service nfactor =3 fuzz=.4 rotate=varimax;

var Q56a1-Q56a9;

run;

proc factor data = service nfactor =4 fuzz=.4 rotate=varimax;

var Q56a1-Q56a9;

run;

See output from SAS
• Let’s perform a factor analysis on this data to see how people’s needs tend to associate and if they are meaningful
• Code

proc factor data = service nfactor =2 fuzz=.4 rotate=varimax;

var Q56a1-Q56a9;

run;

proc factor data = service nfactor =3 fuzz=.4 rotate=varimax;

var Q56a1-Q56a9;

run;

proc factor data = service nfactor =4 fuzz=.4 rotate=varimax;

var Q56a1-Q56a9;

run;