Page 297 - DMGT404 RESEARCH_METHODOLOGY

Unit 13: Multivariate Analysis

A, B, D, E into factor-1 Notes
F into Factor -2
C into Factor - 3
Factor - 1 can be termed as Technical factor;

Factor - 2 can be termed as Price factor;
Factor - 3 can be termed as Personal factor.
For future analysis, while conducting a study to obtain customers’ opinion, three factors
mentioned above would be sufficient. One basic purpose of using factor analysis is to reduce the
number of independent variables in the study. By having too many independent variables, the
M.R study will suffer from following disadvantages:
1. Time for data collection is very high due to several independent variables.
2. Expenditure increases due to the time factor.
3. Computation time is more, resulting in delay.
4. There may be redundant independent variables.

Did u know? What is correspondence analysis?
Correspondence analysis is a descriptive/exploratory technique designed to analyze
simple two-way and multi-way tables containing some measure of correspondence between
the rows and columns.
The results provide information which is similar in nature to those produced by Factor Analysis
techniques, and they allow one to explore the structure of categorical variables included in the
table. The most common kind of table of this type is the two-way frequency cross-tabulation
table.

In a typical correspondence analysis, a cross-tabulation table of frequencies is first standardized,
so that the relative frequencies across all cells sum to 1.0. One way to state the goal of a typical
analysis is to represent the entries in the table of relative frequencies in terms of the distances
between individual rows and/or columns in a low-dimensional space.

Example: Following are the data on the drinking habits of different employees in an
organization:
Drinking Habits
(2) (3)
Employee Group (1) None (4) Heavy Row Totals
Light Medium
(1) Senior Level Management 5 2 4 3 14
(2) Middle Level Management 4 2 5 9 20
(3) Junior Level Management 15 12 10 5 42
(4) Executives 25 20 30 15 90
(5) Other Employees 30 5 10 5 50
Column Totals 79 41 59 37 216

One may think of the 4 column values in each row of the table as coordinates in a 4-dimensional
space, and one could compute the (Euclidean) distances between the 5 row points in the 4-

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