Principal Component and Factor Analysis

Erik Mooi, Marko Sarstedt and Irma Mooi-Reci
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Erik Mooi: University of Melbourne
Marko Sarstedt: Otto-von-Guericke-University
Irma Mooi-Reci: University of Melbourne

Chapter 8 in Market Research, 2018, pp 265-311 from Springer

Abstract: Abstract We first provide comprehensive and advanced access to principal component analysis, factor analysis, and reliability analysis. Based on a discussion of the different types of factor analytic procedures (exploratory factor analysis, confirmatory factor analysis, and structural equation modeling), we introduce the steps involved in a principal component analysis and a reliability analysis, offering guidelines for executing them in Stata. Specifically, we cover the requirements for running an analysis, modern options for extracting the factors and deciding on their number, as well as for interpreting and judging the quality of the results. Based on a step-by-step description of Stata’s menu options and code, we present an in-depth discussion of each element of the Stata output. Interpretation of output can be difficult, which we make much easier by means of various illustrations and applications, using a detailed case study to quickly make sense of the results. We conclude with suggestions for further readings on the use, application, and interpretation of factor analytic procedures.

Keywords: Akaike Information Criterion (AIC); Anti-image; Bartlett method; Bayes Information Criterion (BIC); Communality; Components; Confirmatory factor analysis; Correlation residuals; Covariance-based structural equation modeling; Cronbach’s alpha; Eigenvalue; Eigenvectors; Exploratory factor analysis; Factor analysis; Factor loading; Factor rotation; Factor scores; Factor weights; Factors; Heywood cases; Internal consistency reliability; Kaiser criterion; Kaiser–Meyer–Olkin criterion; Latent root criterion; Measure of sampling adequacy; Oblimin rotation; Orthogonal rotation; Oblique rotation; Parallel analysis; Partial least squares structural equation modeling; Path diagram; Principal axis factoring; Principal components; Principal component analysis; Principal factor analysis; Promax rotation; Regression method; Reliability analysis; Scree plot; Split-half reliability; Structural equation modeling; Test-retest reliability; Uniqueness; Varimax rotation (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-981-10-5218-7_8

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DOI: 10.1007/978-981-10-5218-7_8

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