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Re-run the Oddjob Airways case study by carrying out a factor analysis and compare
the results with the example carried out using PCA. Are there any significant
differences?

Answer

PCA, short for Principal Component Analysis and Factor Analysis, are two statistical
methods that are often covered together in the class of multivariate statistics.

A statistical method that "reorganizes" the PCA variable into a small number of variables
called components. This realignment is based on fluctuations common to multiple variables.
Like the

PCA, factor analysis is a model that can reduce information from multiple variables to a few
variables. In factor analysis, these are called 'latent variables'.

Factor analysis is based on a model called the common factor model. It starts with the
principle that the dataset has a certain number of factors, and each measured variable captures
one or more of these factors.

What is reliability analysis and why is it important?

Answer

You can study the attributes of the measurement scale and the items that make up the scale
through reliability analysis. The reliability analysis procedure calculates the reliability
measurement of commonly used scales and also provides information about the relationships
between each item of the scale.

Explain the basic principle of structural equation modeling.

Answer

Structural equation modeling (SEM) is a set of statistical methods used to measure and
analyze the relationship between observed and latent variables. Similar to regression, but
more powerful, it checks for linear causality between variables and takes into account
measurement errors at the same time.