Cluster 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 9 in Market Research, 2018, pp 313-366 from Springer

Abstract: Abstract We provide comprehensive and advanced knowledge of cluster analysis knowledge. We first introduce the principles of cluster analysis and outline the steps and decisions involved. We discuss how to select appropriate clustering variables and subsequently introduce modern hierarchical and partitioning methods for cluster analysis, using simple examples to illustrate how they work. We also discuss the key measures of similarity and dissimilarity, and offer guidance on how to decide the number of clusters to extract from the data. Each step in a cluster analysis is subsequently linked to its execution in Stata (using menus and code), thus enabling readers to analyze, chart, and validate the results. Interpretation of Stata output can be difficult, but we make this easier by means of an annotated case study. We conclude with suggestions for further readings on the use, application, and interpretation of cluster analysis.

Keywords: Agglomerative clustering; Average linkage; Canberra distance; Centroid linkage; Chaining effect; Chebychev distance; City-block distance; Clusters; Clustering variables; Complete linkage; Dendrogram; Distance matrix; Divisive clustering; Duda-Hart index; Euclidean distance; Factor-cluster segmentation; Gower’s dissimilarity coefficient; Hierarchical clustering methods; Partitioning methods; k-means; k-medians; k-means++; k-medoids; Label switching; Linkage algorithm; Local optimum; Mahalanobis distance; Manhattan metric; Market segmentation; Matching coefficients; Non-hierarchical clustering methods; Profiling; Russel and Rao coefficient; Single linkage; Simple matching coefficient; Straight line distance; Ties; Variance ration criterion; Ward’s linkage; Weighted average linkage (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_9

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DOI: 10.1007/978-981-10-5218-7_9

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