Factor Analysis

SPSS for Windows® Intermediate & Advanced Applied Statistics

Zayed University Office of Research SPSS for Windows® Workshop Series

Presented by

Dr. Maher Khelifa

Associate Professor
Department of Humanities and Social Sciences
College of Arts and Sciences

© Dr. Maher Khelifa

 Understanding Factor Analysis
2

This workshop discusses factor analysis as an exploratory

and confirmatory multivariate technique.

© Dr. Maher Khelifa

 Understanding Factor Analysis
3

Factor analysis is commonly used in:

 Data reduction
 Scale development
 The evaluation of the psychometric quality of a measure, and
 The assessment of the dimensionality of a set of variables.

© Dr. Maher Khelifa

 Understanding Factor Analysis
4

Regardless of purpose, factor analysis is used in:

 the determination of a small number of factors based on a particular
number of inter-related quantitative variables.

Unlike variables directly measured such as speed, height,

weight, etc., some variables such as egoism, creativity,
happiness, religiosity, comfort are not a single
measurable entity.

They are constructs that are derived from the

measurement of other, directly observable variables .

© Dr. Maher Khelifa

 Understanding Factor Analysis
5
 Constructs are usually defined as unobservable latent variables. E.g.:
 motivation/love/hate/care/altruism/anxiety/worry/stress/product quality/physical
aptitude/democracy /reliability/power.

 Example: the construct of teaching effectiveness. Several variables are used

to allow the measurement of such construct (usually several scale items are
used) because the construct may include several dimensions.

 Factor analysis measures not directly observable constructs by measuring

several of its underlying dimensions.
 The identification of such underlying dimensions (factors) simplifies the
understanding and description of complex constructs.

© Dr. Maher Khelifa

 Understanding Factor Analysis
6

 Generally, the number of factors is much smaller than the number

of measures.

 Therefore, the expectation is that a factor represents a set of

measures.

 From this angle, factor analysis is viewed as a data-reduction

technique as it reduces a large number of overlapping variables to
a smaller set of factors that reflect construct(s) or different
dimensions of contruct(s).

© Dr. Maher Khelifa

 Understanding Factor Analysis
7

The assumption of factor analysis is that underlying

dimensions (factors) can be used to explain complex
phenomena.

Observed correlations between variables result from their

sharing of factors.

Example: Correlations between a person’s test scores

might be linked to shared factors such as general
intelligence, critical thinking and reasoning skills, reading
comprehension etc.

© Dr. Maher Khelifa

 Ingredients of a Good Factor Analysis Solution
8

A major goal of factor analysis is to represent

relationships among sets of variables parsimoniously yet
keeping factors meaningful.

A good factor solution is both simple and interpretable.

When factors can be interpreted, new insights are

possible.

© Dr. Maher Khelifa

 Application of Factor Analysis
9

This workshop will examine three common applications

of factor analysis:
 Defining indicators of constructs
 Defining dimensions for an existing measure
 Selecting items or scales to be included in a measure.

© Dr. Maher Khelifa

 Application of Factor Analysis
10

 Defining indicators of constructs:

 Ideally 4 or more measures should be chosen to represent each construct of

interest.

 The choice of measures should, as much as possible, be guided by theory,

previous research, and logic.

© Dr. Maher Khelifa

 Application of Factor Analysis
11

Defining dimensions for an existing measure:

 In this case the variables to be analyzed are chosen by the initial
researcher and not the person conducting the analysis.
 Factor analysis is performed on a predetermined set of items/scales.
 Results of factor analysis may not always be satisfactory:
 The items or scales may be poor indicators of the construct or constructs.
 There may be too few items or scales to represent each underlying
dimension.

© Dr. Maher Khelifa

 Application of Factor Analysis
12

 Selecting items or scales to be included in a measure.

 Factor analysis may be conducted to determine what items or scales
should be included and excluded from a measure.
 Results of the analysis should not be used alone in making decisions of
inclusions or exclusions. Decisions should be taken in conjunction with
the theory and what is known about the construct(s) that the items or
scales assess.

© Dr. Maher Khelifa

 Steps in Factor Analysis
13

Factor analysis usually proceeds in four steps:

 1st Step: the correlation matrix for all variables is computed
 2nd Step: Factor extraction
 3rd Step: Factor rotation
 4th Step: Make final decisions about the number of underlying factors

© Dr. Maher Khelifa

 Steps in Factor Analysis:
The Correlation Matrix
14

1st Step: the correlation matrix

 Generate a correlation matrix for all variables
 Identify variables not related to other variables
 If the correlation between variables are small, it is unlikely that they
share common factors (variables must be related to each other for the
factor model to be appropriate).
 Think of correlations in absolute value.
 Correlation coefficients greater than 0.3 in absolute value are
indicative of acceptable correlations.
 Examine visually the appropriateness of the factor model.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
The Correlation Matrix
15

 Bartlett Test of Sphericity:

 used to test the hypothesis the correlation matrix is an identity matrix (all
diagonal terms are 1 and all off-diagonal terms are 0).

 If the value of the test statistic for sphericity is large and the associated
significance level is small, it is unlikely that the population correlation matrix is
an identity.

 If the hypothesis that the population correlation matrix is an identity cannot

be rejected because the observed significance level is large, the use of the
factor model should be reconsidered.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
The Correlation Matrix
16

 The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy:

 is an index for comparing the magnitude of the observed correlation coefficients
to the magnitude of the partial correlation coefficients.

 The closer the KMO measure to 1 indicate a sizeable sampling adequacy (.8 and
higher are great, .7 is acceptable, .6 is mediocre, less than .5 is unaccaptable ).

 Reasonably large values are needed for a good factor analysis. Small KMO
values indicate that a factor analysis of the variables may not be a good idea.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Extraction
17

 2nd Step: Factor extraction

 The primary objective of this stage is to determine the factors.
 Initial decisions can be made here about the number of factors underlying a set
of measured variables.
 Estimates of initial factors are obtained using Principal components analysis.
 The principal components analysis is the most commonly used extraction
method . Other factor extraction methods include:
 Maximum likelihood method
 Principal axis factoring
 Alpha method
 Unweighted lease squares method
 Generalized least square method
 Image factoring.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Extraction
18

 In principal components analysis, linear combinations of the

observed variables are formed.

 The 1st principal component is the combination that accounts for the
largest amount of variance in the sample (1st extracted factor).

 The 2nd principle component accounts for the next largest amount of
variance and is uncorrelated with the first (2nd extracted factor).

 Successive components explain progressively smaller portions of

the total sample variance, and all are uncorrelated with each other.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Extraction
19
 To decide on how many factors
we need to represent the data, we
use 2 statistical criteria: Total Variance Explained

Extraction Sums of Squared

 Eigen Values, and Initial Eigenvalues Loadings
 The Scree Plot. Comp % of Cumulativ % of Cumulativ
onent Total Variance e% Total Variance e%

1 3.046 30.465 30.465 3.046 30.465 30.465

 The determination of the number
2 1.801 18.011 48.476 1.801 18.011 48.476
of factors is usually done by 3 1.009 10.091 58.566 1.009 10.091 58.566
considering only factors with 4 .934 9.336 67.902
Eigen values greater than 1. 5 .840 8.404 76.307

6 .711 7.107 83.414

 Factors with a variance less than 1 7 .574 5.737 89.151

are no better than a single 8

9
.440

.337
4.396

3.368
93.547

96.915
variable, since each variable is 10 .308 3.085 100.000
expected to have a variance of 1. Extraction Method: Principal Component Analysis.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Extraction
20
 The examination of the Scree plot provides a
visual of the total variance associated with each
factor.

 The steep slope shows the large factors.

 The gradual trailing off (scree) shows the rest of

the factors usually lower than an Eigen value of 1.

 In choosing the number of factors, in addition to

the statistical criteria, one should make initial
decisions based on conceptual and theoretical
grounds.

 At this stage, the decision about the number of

factors is not final.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Extraction
21
Component Matrix using Principle Component Analysis
Component Matrixa

Component

1 2 3

I discussed my frustrations and feelings with person(s) in school .771 -.271 .121

I tried to develop a step-by-step plan of action to remedy the problems .545 .530 .264

I expressed my emotions to my family and close friends .580 -.311 .265

I read, attended workshops, or sought someother educational approach to correct the .398 .356 -.374
problem

I tried to be emotionally honest with my self about the problems .436 .441 -.368

I sought advice from others on how I should solve the problems .705 -.362 .117

I explored the emotions caused by the problems .594 .184 -.537

I took direct action to try to correct the problems .074 .640 .443

I told someone I could trust about how I felt about the problems .752 -.351 .081

I put aside other activities so that I could work to solve the problems .225 .576 .272

Extraction Method: Principal Component Analysis.

a. 3 components extracted.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Rotation
22

3rd Step: Factor rotation.

In this step, factors are rotated.

Un-rotated factors are typically not very interpretable (most

factors are correlated with may variables).

Factors are rotated to make them more meaningful and easier

to interpret (each variable is associated with a minimal number
of factors).

Different rotation methods may result in the identification of

somewhat different factors.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Rotation
23

 The most popular rotational method is Varimax rotations.

 Varimax use orthogonal rotations yielding uncorrelated factors/components.

 Varimax attempts to minimize the number of variables that have high loadings
on a factor. This enhances the interpretability of the factors.

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Rotation
24

 Other common rotational method used include Oblique rotations which yield
correlated factors.

 Oblique rotations are less frequently used because their results are more
difficult to summarize.

 Other rotational methods include:

 Quartimax (Orthogonal)
 Equamax (Orthogonal)
 Promax (oblique)

© Dr. Maher Khelifa

 Steps in Factor Analysis:
Factor Rotation
25
 A factor is interpreted or named by examining the largest values linking the factor to
the measured variables in the rotated factor matrix.
Rotated Component Matrixa

Component

1 2 3

I discussed my frustrations and feelings with person(s) in school .803 .186 .050

I tried to develop a step-by-step plan of action to remedy the problems .270 .304 .694

I expressed my emotions to my family and close friends .706 -.036 .059

I read, attended workshops, or sought someother educational approach to .050 .633 .145
correct the problem

I tried to be emotionally honest with my self about the problems .042 .685 .222

I sought advice from others on how I should solve the problems .792 .117 -.038

I explored the emotions caused by the problems .248 .782 -.037

I took direct action to try to correct the problems -.120 -.023 .772

I told someone I could trust about how I felt about the problems .815 .172 -.040

I put aside other activities so that I could work to solve the problems -.014 .155 .657

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

© Dr. Maher Khelifa a. Rotation converged in 5 iterations.

 Steps in Factor Analysis:
Making Final Decisions
26

4th Step: Making final decisions

 The final decision about the number of factors to choose is the number of factors for
the rotated solution that is most interpretable.
 To identify factors, group variables that have large loadings for the same factor.
 Plots of loadings provide a visual for variable clusters.
 Interpret factors according to the meaning of the variables

 This decision should be guided by:

 A priori conceptual beliefs about the number of factors from past research or theory
 Eigen values computed in step 2.
 The relative interpretability of rotated solutions computed in step 3.

© Dr. Maher Khelifa

 Assumptions Underlying Factor Analysis
27

 Assumption underlying factor analysis include.

 The measured variables are linearly related to the factors + errors.
 This assumption is likely to be violated if items limited response scales (two-
point response scale like True/False, Right/Wrong items).
 The data should have a bi-variate normal distribution for each pair of
variables.
 Observations are independent.
 The factor analysis model assumes that variables are determined by
common factors and unique factors. All unique factors are assumed to be
uncorrelated with each other and with the common factors.

© Dr. Maher Khelifa

 Obtaining a Factor Analysis
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 Click:
 Analyze and
select
 Dimension
Reduction
 Factor
 A factor
Analysis Box
will appear

© Dr. Maher Khelifa

 Obtaining a Factor Analysis
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 Move
variables/scale
items to Variable
box

© Dr. Maher Khelifa

 Obtaining a Factor Analysis
30

Factor
extraction
When
variables
are in
variable
box, select:
 Extraction

© Dr. Maher Khelifa

 Obtaining a Factor Analysis
31

 When the factor

extraction Box
appears, select:
 Scree Plot

 keep all default

selections
including:
 Principle component
Analysis
 Based on Eigen Value of
1, and
 Un-rotated factor
solution

© Dr. Maher Khelifa

 Obtaining a Factor Analysis
32

 During
factor
extraction
keep factor
rotation
default of:
 None
 Press
continue

© Dr. Maher Khelifa

 Obtaining a Factor Analysis
33
 During Factor
Rotation:
 Decide on the
number of factors
based on actor
extraction phase and
enter the desired
number of factors by
choosing:
 Fixed number of
factors and entering
the desired number of
factors to extract.
 Under Rotation
Choose Varimax
 Press continue
 Then OK

© Dr. Maher Khelifa

 Bibliographical References
34
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© Dr. Maher Khelifa

 Bibliographical References
35
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© Dr. Maher Khelifa

 Bibliographical References
36
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© Dr. Maher Khelifa