2010

9/19/2010

Advanced Methods of Data

Analysis Project Report:
“Study on what factors people
look for when they take a home”

Submitted to:

Mrs. Shailaja Rego

Submitted by:

Subhojit Chatterjee
Roll No.: 406
Division E, MBA - Core
 “Study on what factors people look for when they take a home”

Contents

Introduction …………………………………………………………………………………………3

Methodology …………..……………………………………………………………………………3

Cluster Analysis …………………………………………………………………………………….5

Factor Analysis …………………………………………………………………………………….11

Conclusion….…. …………………………………………………………………………………...12

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 “Study on what factors people look for when they take a home”

Introduction

Why I Took This Topic For Project?

In India buying a home is one of the biggest aspirations of any household irrespective of the
class to which that household belongs. A lot of thought process and research work goes into the
process and research work goes into the process of selecting a perfect house. Also such
considerations are take place while taking a house for lease or rent.

A house is such a basic need that people do not change it that easily even if they are
unsatisfied with it. Also a person, if asked won‟t reveal that easily that he/she is unsatisfied with
his/her current house. This kind of natural behavior forces the person to give a biased answer
when asked about the overall satisfaction level from his/her house. My research aims at finding
the relation of some of the factors which affect the overall satisfaction level of a home owner.
For convenience I have targeted NMIMS students specially first year to get genuine response. I
also wanted to verify our analysis as we are using most crucial tool SPSS.

Methodology

As a part of Advanced Methods of Data Analysis project, I chose to study Real Estate because
of the reason that it is one of the hottest sectors these days. With limited amount of resources
available to a country, it is of utmost importance to manage it properly. It‟s very essential for a
researcher to understand the satisfaction level of customers while having a home so that they
can more focus to cater their preferences. Being in Mumbai, the costliest city in India & among
the top 100 costliest cities all around the world, the study of factors on which a person chooses
his/her household becomes all the more important.

The objective of the study was to study various aspects as to what influences the behavior of an
individual having a house. These include locality, size, price, availability of electricity as well as
water etc. The detailed questionnaire is as follows:

Q1. What is your total household income level

 less than 3 laces

 between 3 to 6 lacs
 6 to 9 lacs
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 “Study on what factors people look for when they take a home”

 more than 9 lacs

Q2. Are you satisfied with location of your house?

 With Highly satisfied as 1 & Not satisfied as 5 (scale 1 to 5)

Q3. Are you satisfied with total square feet area of your house?
 Highly satisfied to not satisfied (scale 1 to 5)

Q4. Family member to bedroom ratio?

 Less than 1
 greater than or equal to1 but less than 2
 greater than or equal to 2 but less than 3
 greater than or equal to 3

Q5. How old is your house

 less than or equal to 3
 greater than 3 but less than or equal to 6
 greater than 6 but less than or equal to 9
 greater than 9

Q6. How much maintenance charges you can afford annually for your house?
 0 to 3000
 2.3000 to 6000
 3.6000 to 9000
 4. more than 9000

Q7. Are you satisfied with your neighborhood?

 1 for highly satisfied to 5 for Not satisfied(scale 1 to 5)

Q8.Are you satisfied with electricity and water supply?

 1 for highly satisfied to 5 for Not satisfied(scale 1 to 5)

Q9.What is the overall satisfaction level with your current house?

 1 for highly satisfied to 5 for Not satisfied(scale 1 to 5)

I searched for the questions through internet which becomes the secondary data, discussed it in
group through our brainstorming sessions & then finalized the above questionnaire.
Originally we had a set of 16 questions but then we had to make the questionnaire a bit concise
so that it catches the attention of the respondent & he does not fill the questionnaire for the sake
of it. Through discussion I selected only above mentioned 9 questions which I thought was the
most important while having a house.
After the questionnaire was designed, I gathered the responses of 97 respondents which
constitute my primary data. The responses were gathered through online as well as personal
surveys. After the responses were gathered, I analyzed the data through SPSS techniques
which included Cluster analysis and Factor analysis.

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 “Study on what factors people look for when they take a home”

Sampling Technique
My motto from this project was to analyze our data by using SPSS tool and for the verification of
analysis done by me after using SPSS, I asked 5 respondents and asked them to comment on
my analysis and got good response which is mentioned in “Final analysis” part of this project. I
chose Convenience Sampling as sampling Technique because it is easiest and cheapest to
conduct so that I can keep a genuine and more accurate data. My respondents constitute an
informal pool of friends.

Nature of Data
The data collected is through Questionnaire hence it is primary data.

The date file is attached, along with.

Study on what
people look for when they take a home and their satisfaction level.xls

Cluster Analysis

Why it is a 3 cluster analysis?

From the above table we see that the coefficient in agglomeration schedule increases by 5.241
in case of 3 cluster and 3.334 in case of 3 clusters.

Agglomeration Schedule

Cluster Combined Stage Cluster First Appears

Stage Cluster 1 Cluster 2 Coefficients Cluster 1 Cluster 2 Next Stage

1 81 97 1.000 0 0 9

2 86 88 1.000 0 0 18

3 57 78 1.000 0 0 16

4 29 64 1.000 0 0 20

5 17 59 1.000 0 0 39
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6 6 56 1.000 0 0 21

7 26 44 1.000 0 0 16

8 30 38 1.000 0 0 10

9 81 90 1.500 1 0 22

10 8 30 1.500 0 8 38

11 33 77 2.000 0 0 37

12 24 76 2.000 0 0 33

13 62 73 2.000 0 0 71

14 16 71 2.000 0 0 25

15 58 63 2.000 0 0 35

16 26 57 2.000 7 3 19

17 10 45 2.000 0 0 30

18 86 93 2.500 2 0 30

19 26 65 2.500 16 0 27

20 9 29 2.500 0 4 42

21 5 6 2.500 0 6 37

22 35 81 3.000 0 9 38

23 18 67 3.000 0 0 40

24 22 50 3.000 0 0 60

25 16 46 3.000 14 0 65

26 3 19 3.000 0 0 52

27 26 83 3.600 19 0 54

28 31 94 4.000 0 0 55

29 68 89 4.000 0 0 59

30 10 86 4.000 17 18 41

31 11 85 4.000 0 0 76

32 55 75 4.000 0 0 54

33 24 70 4.000 12 0 43

34 12 69 4.000 0 0 67

35 25 58 4.000 0 15 45

36 4 43 4.000 0 0 44

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37 5 33 4.333 21 11 53

38 8 35 4.417 10 22 56

39 17 61 4.500 5 0 76

40 7 18 4.500 0 23 55

41 10 54 4.600 30 0 45

42 9 84 4.667 20 0 46

43 24 53 5.000 33 0 60

44 4 15 5.000 36 0 62

45 10 25 5.389 41 35 61

46 9 47 5.500 42 0 77

47 34 95 6.000 0 0 63

48 13 91 6.000 0 0 68

49 72 79 6.000 0 0 71

50 23 37 6.000 0 0 53

51 1 28 6.000 0 0 64

52 3 80 6.500 26 0 73

53 5 23 6.600 37 50 75

54 26 55 6.667 27 32 61

55 7 31 6.667 40 28 74

56 8 14 6.857 38 0 69

57 48 87 7.000 0 0 81

58 52 74 7.000 0 0 62

59 21 68 7.000 0 29 66

60 22 24 7.000 24 43 75

61 10 26 7.472 45 54 69

62 4 52 7.833 44 58 77

63 34 60 8.000 47 0 70

64 1 36 8.000 51 0 67

65 16 40 8.333 25 0 79

66 21 27 8.333 59 0 73

67 1 12 8.333 64 34 82

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 “Study on what factors people look for when they take a home”

68 2 13 9.000 0 48 78

69 8 10 9.412 56 61 80

70 34 42 9.667 63 0 72

71 62 72 10.000 13 49 78

72 34 66 10.250 70 0 74

73 3 21 10.250 52 66 83

74 7 34 10.560 55 72 86

75 5 22 11.476 53 60 79

76 11 17 11.667 31 39 85

77 4 9 11.960 62 46 80

78 2 62 12.833 68 71 83

79 5 16 13.250 75 65 84

80 4 8 13.324 77 69 84

81 41 48 13.500 0 57 88

82 1 32 14.600 67 0 88

83 2 3 15.347 78 73 87

84 4 5 15.679 80 79 86

85 11 96 16.000 76 0 90

86 4 7 17.742 84 74 87

87 2 4 18.661 83 86 89

88 1 41 21.611 82 81 89

89 1 2 24.423 88 87 91

90 11 20 31.667 85 0 92

91 1 39 33.435 89 0 92

92 1 11 45.791 91 90 0

When case cluster 90 and 91 gets combined the % change = (33.435-31.667)/31.667 * 100 =
5.58 %

When case cluster 90 and 91 gets combined the % change = (31.667-24.423)/24.423 * 100 =
29.67 %

Because of the larger change in the agglomeration schedule I have taken 3 cluster solution as
the optimum solution.
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We now run the K means analysis r for 3 cluster analysis and we got 33, 12 and 48 cases in
cluster 1, 2 and 3 respectively

Number of Cases in each

Cluster

Cluster 1 33.000

2 12.000

3 48.000

Valid 93.000

Missing 4.000

From the ANOVA table:

ANOVA

Cluster Error

Mean Square df Mean Square df F Sig.

Are you satisfied with the

27.810 2 .585 90 47.549 .000
location of your house?

Are you satisfied with area of

28.735 2 .514 90 55.942 .000
your house?

Are you satisfied with your

40.303 2 .689 90 58.466 .000
neighbourhood?

Are you satisfied with electricity

10.566 2 .865 90 12.213 .000
and water supply?

Overall satisfaction level with

26.034 2 .457 90 56.986 .000
your current house?

V1 16.156 2 .913 90 17.698 .000

V2 1.212 2 .614 90 1.974 .145

V3 .834 2 1.463 90 .570 .567

V4 13.004 2 1.199 90 10.842 .000

The F tests should be used only for descriptive purposes because the clusters have been chosen to maximize the differences
among cases in different clusters. The observed significance levels are not corrected for this and thus cannot be interpreted
as tests of the hypothesis that the cluster means are equal.
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From the ANOVA table we find that all the factors are significant except for V3 which is the
dummy variable for „How old is your house?‟. Thus we infer that people do not take into
consideration of the age of the house in Mumbai while making a purchasing decision.

Now we find mean

Process:- Analyze -> Compare Means ->Means

Preference of attributes correspond to their satisfaction in given cluster both MAXIMUM

Preference to satisfaction (Red colored) MINIMUM Preference to satisfaction (Blue colored)

Report
Are you Are you Are you Are you Overall
satisfied with satisfied with satisfied with satisfied with satisfaction
the location of area of your your electricity and level with your
Cluster Number of Case your house? house? neighborhood? water supply? current house?
1 Mean 4.47 4.55 4.37 4.35 4.51
N 49 49 49 49 49
Std. Deviation .616 .542 .636 .631 .505
2 Mean 3.37 3.51 2.71 3.93 3.51
N 41 41 41 41 41
Std. Deviation .799 .779 .981 .932 .675
3 Mean 1.57 1.57 1.71 2.00 1.57
N 7 7 7 7 7
Std. Deviation .787 .787 1.113 1.528 .787
Total Mean 3.79 3.90 3.47 4.00 3.88
N 97 97 97 97 97
Std. Deviation 1.080 1.056 1.251 1.031 1.003
We can see the figures which are red are preferred maximum and those are blue are minimum
preferred to satisfaction in a particular cluster so we find that :-

Cluster 1:- These respondents most prefer their satisfaction as “Area of the house” and least
prefer to “Electricity and water supply”

In the same way in Cluster 2:- Maximum “Electricity and water supply” and Min “Neighborhood”
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Cluster 3:- Maximum “Electricity and water supply” and similar least preference to 2 attribute
Location and area of the house

• KMO and Bartlett's Test of Sphericity. The Kaiser-Meyer-Olkin measure of sampling adequacy
tests whether the partial correlations among variables are small. Bartlett's test of sphericity tests
whether the correlation matrix is an identity matrix, which would indicate that the factor model is
inappropriate.

Factor Analysis
To find which are main attributes which lead to the satisfaction level of the customers buying a
house?

For this we have done the factor analysis.

Steps followed are as follows: Analyze -> Data Reduction -> Factor -> go to descriptive and
click coefficient, significance level and KMO and Barlett‟s test and univariate descriptive
Go to extraction and click correlation matrix and choose Eigen value> and maximum iteration
for convergence = 999

Rotation: Varimax and rotated solution

Options -> Exclude case list wise and suppress small coefficient to 0.1 in coefficient display
Then we find all values in correlation matrix are less than 0.05 so all are significant.
If KMO is less than 0.5 then the data is inadequate for factor analysis. We got KMO value of
0.770 which means that the data is adequate for factor analysis.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .770

Bartlett's Test of Sphericity Approx. Chi-Square 158.260

df 28.000

Sig. .000

Rotated component matrix: There are two main components. In component 1 we had location of
the house, area of the house, Neighborhood and Water+ Electricity supply, V1 (Household
income level) and V4 (Maintenance charge affordability).

In component 2, we had V2 (family member to bedroom ratio) and V3 (how old is your house)

a
Rotated Component Matrix

Component
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1 2

Are you satisfied with the

.809 -.082
location of your house?

Are you satisfied with area of

.817 -.095
your house?

Are you satisfied with your

.764 .006
neighbourhood?

Are you satisfied with

.646 -.073
electricity and water supply?

V1 .631 .358

V2 -.085 .732

V3 .038 .635

V4 .405 -.323

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 3 iterations.

Conclusion
We get only very few information through forming of clusters and factors, only what are the main
factors on which the choice of the house of a person depends on. We should extend our
analysis to discriminant analysis and multidimensional scaling.

We conclude that there are mainly 3 clusters into which the people can be segregated and also
there are two main factors on which the buying behavior depends. They are: 1) Features and
ambience of the house and 2) requirement-characteristics fit of the house.

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