Factor Analysis

Notes Output Created Comments Input Active Dataset Filter Weight Split File N of Rows in Working Data File Missing Value Handling Definition of Missing MISSING=EXCLUDE: User-defined missing values are treated as missing. Cases Used LISTWISE: Statistics are based on cases with no missing values for any variable used. Syntax FACTOR /VARIABLES MgRoadBrigadeRoad IndiranagarOldMadrasRoad JayanagarJ.Pnagar Koramangala Whitefield ElectronicCity OutskirtsofBangalore /MISSING LISTWISE /ANALYSIS MgRoadBrigadeRoad IndiranagarOldMadrasRoad JayanagarJ.Pnagar Koramangala Whitefield ElectronicCity OutskirtsofBangalore /PRINT UNIVARIATE INITIAL CORRELATION SIG DET KMO EXTRACTION ROTATION /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) DataSet3 <none> <none> <none> 100 05-Mar-2012 23:30:51

Notes Output Created Comments Input Active Dataset Filter Weight Split File N of Rows in Working Data File Missing Value Handling Definition of Missing MISSING=EXCLUDE: User-defined missing values are treated as missing. Cases Used LISTWISE: Statistics are based on cases with no missing values for any variable used. Syntax FACTOR /VARIABLES MgRoadBrigadeRoad IndiranagarOldMadrasRoad JayanagarJ.Pnagar Koramangala Whitefield ElectronicCity OutskirtsofBangalore /MISSING LISTWISE /ANALYSIS MgRoadBrigadeRoad IndiranagarOldMadrasRoad JayanagarJ.Pnagar Koramangala Whitefield ElectronicCity OutskirtsofBangalore /PRINT UNIVARIATE INITIAL CORRELATION SIG DET KMO EXTRACTION ROTATION /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) DataSet3 <none> <none> <none> 100 05-Mar-2012 23:30:51

Notes Output Created Comments Input Active Dataset Filter Weight Split File N of Rows in Working Data File Missing Value Handling Definition of Missing MISSING=EXCLUDE: User-defined missing values are treated as missing. Cases Used LISTWISE: Statistics are based on cases with no missing values for any variable used. Syntax FACTOR /VARIABLES MgRoadBrigadeRoad IndiranagarOldMadrasRoad JayanagarJ.Pnagar Koramangala Whitefield ElectronicCity OutskirtsofBangalore /MISSING LISTWISE /ANALYSIS MgRoadBrigadeRoad IndiranagarOldMadrasRoad JayanagarJ.Pnagar Koramangala Whitefield ElectronicCity OutskirtsofBangalore /PRINT UNIVARIATE INITIAL CORRELATION SIG DET KMO EXTRACTION ROTATION /PLOT EIGEN /CRITERIA MINEIGEN(1) ITERATE(25) /EXTRACTION PC /CRITERIA ITERATE(25) DataSet3 <none> <none> <none> 100 05-Mar-2012 23:30:51

[DataSet3]

Descriptive Statistics Analysis N 100 100 100 100 100 100 100

Mean Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore 3.34 3.82 3.23 3.03 2.65 4.06 3.59

Std. Deviation 1.278 1.198

1.139 1.192 1.196 1.275 1.313

Analysis: a. Mean - These are the means of the variables used in the factor analysis. Here the means of all the variables are computed. b. Std. Deviation - These are the standard deviations of the variables used in the factor analysis. The standard deviation of all the variables with respect to the mean of the variables. c. Analysis N - This is the number of cases used in the factor analysis.

Correlation Matrixa Jayanagar/ J.P nagar .423 .333 1.000 .388 .075 .271 -.109 .000 .000

Mg Road / Brigade Road Correlation Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore Sig. (1-tailed) Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore a. Determinant = .240 .000 .000 .191 .182 .011 .000 .423 .511 -.088 .092 -.228 1.000 .438

Indira nagar/ Old Madras Road .438 1.000

.333 .372 -.025 .101 -.156 .000

.000 .000 .402 .159 .060 .228 .003 .141 .000

Correlation Matrixa Outskirts of Koramangala Correlation Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore Sig. (1-tailed) Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore a. Determinant = .240 .386 .312 .002 .000 .000 .017 .000 .228 .386 .003 .312 .000 .141 .002 .000 .017 .388 1.000 .029 -.050 -.292 .000 .000 .075 .029 1.000 .426 .347 .191 .402 .271 -.050 .426 1.000 .211 .182 .159 -.109 -.292 .347 .211 1.000 .011 .060 .511 .372 Whitefield -.088 -.025 Electronic City .092 .101 Bangalore -.228 -.156

Analysis: The correlation matrix is also known as the R-matrix. The top half of this table contains the Pearson correlation coefficient between all pairs of questions or attributes in this case. Whereas the bottom half contains the one-tailed significance of these coefficients. Through this matrix we can check the pattern of the relationships. First, it is necessary to scan the significance values that are

greater than 0.05. Then looking at the correlation coefficients themselves and look for any greater than 0.9.If any are found then a problem could arise because of singularity in data. In conclusion this table mainly shows the correlation between the attributes themselves and the with the others.

KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square df Sig. 136.924 21 .000 .668

Analysis: a. Kaiser-Meyer-Olkin Measure of Sampling Adequacy - The KMO statistic varies between 0 and 1. A value of 0 indicates that the sum of partial correlations is large relative to the sum of correlations, indicating diffusion in the pattern of correlations (hence, factor analysis is likely to be inappropriate). A value close to 1 indicates that patterns of correlations are relatively compact and so factor analysis should yield distinct and reliable factors. Kaiser (1974) recommends accepting values greater than 0.5 as acceptable. For this model it can be observed that the KMO value is 0.668 which is greater than 0.5. Thus, it can be stated that the factor analysis is appropriate. b. Bartlett's Test of Sphericity - This tests the null hypothesis that the correlation matrix is an identity matrix. An identity matrix is matrix in which all of the diagonal elements are 1 and all off diagonal elements are 0. To reject the null hypothesis the test needs to be significant (i.e. have a significance value less than 0.05). From the above table the value of Bartlett's Test of Sphericity has a significance value of 0.00 that is lesser then 0.05 , thus the null hypothesis is rejected. In conclusion, the correlation matrix for this factor analysis is an identity matrix.

Communalities Extraction .641 .479 .561 .586 .639 .639 .530

Initial Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore 1.000 1.000 1.000 1.000 1.000 1.000 1.000

Extraction Method: Principal Component Analysis.

Analysis: a. Communalities - This is the proportion of each variable's variance that can be explained by the factors (e.g., the underlying latent continua). It is also noted as h2 and can be defined as the sum of squared factor loadings for the variables. b. Initial - With principal factor axis factoring, the initial values on the diagonal of the correlation matrix are determined by the squared multiple correlation of the variable with the other variables. c. Extraction - The values in this column indicate the proportion of each variable's variance that can be explained by the retained factors. Variables with high values are well represented in the common factor space, while variables with low values are not well represented. (In this example, we don't have any particularly low values except the Indiranagar / Old Madras.) They are the reproduced variances from the factors that you have extracted. You can find these values on the diagonal of the reproduced correlation matrix.

Total Variance Explained Compo nent Total 1 2 3 4 5 6 7 2.371 1.704 .719 .705 .619 .515 .367 Initial Eigenvalues % of Variance 33.874 24.344 10.267 10.071 8.844 7.352 5.248 Cumulative % 33.874 58.219 68.485 78.556 87.400 94.752 100.000

Extraction Sums of Squared Loadings Cumulative % 33.874 58.219

Total 2.371 1.704

% of Variance 33.874 24.344

Extraction Method: Principal Component Analysis.

Total Variance Explained Compo nent

Rotation Sums of Squared Loadings Cumulative % 33.762 58.219

Total 1 2 2.363 1.712

% of Variance 33.762 24.456

Extraction Method: Principal Component Analysis.

a. Factor - The initial number of factors is the same as the number of variables used in the factor analysis. However, not all 7 factors will be retained. In this example, only the first two factors will be retained (as calculated from the second table). b. Initial Eigenvalues - Eigenvalues are the variances of the factors. Because we conducted our factor analysis on the correlation matrix, the variables are standardized, which means that the each variable has a variance of 1, and the total variance is equal to the number of variables used in the analysis, in this case, 7.

c. Total - This column contains the eigenvalues. The first factor will always account for the most variance , in this case 2.371 (and hence have the highest eigenvalue), and the next factor will account for as much of the left over variance as it can like 1.704 , and so on. Hence, each successive factor will account for less and less variance. d. % of Variance - This column contains the percent of total variance accounted for by each factor. e. Cumulative % - This column contains the cumulative percentage of variance accounted for by the current and all preceding factors. For example, the third row shows a value of 68.485. This means that the first three factors together account for 68.485% of the total variance. f. Extraction Sums of Squared Loadings - The number of rows in this panel of the table correspond to the number of factors retained. In this example, we have taken only two factors since there are only 7 attributes. So there are two rows, one for each retained factor. The values in this panel of the table are calculated in the same way as the values in the top panel, except that here the values are based on the common variance. The values in this panel of the table will always be lower than the values in the top panel of the table, because they are based on the common variance, which is always smaller than the total variance. g. Rotation Sums of Squared Loadings - The values in this panel of the table represent the distribution of the variance after the varimax rotation. Varimax rotation tries to maximize the variance of each of the factors, so the total amount of variance accounted for is redistributed over the three extracted factors.

The scree plot graphs the eigenvalue against the factor number. You can see these values in the first two columns of the table immediately above. From the third factor on, you can see that the line is almost flat, meaning the each successive factor is accounting for smaller and smaller amounts of the total variance. Thus, for this factor analysis only two factors are chosen so that they can explain almost all the variance caused very clearly.

Component Matrixa Component 2 .800 .688 .307 -.054 .795 .791 .587 .005 .074

1 Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore .683 .764 -.082 .120 -.431

Extraction Method: Principal Component Analysis. a. 2 components extracted.

Analysis: Factor / Component Matrix - This table contains the unrotated factor loadings, which are the correlations between the variable and the factor. Because these are correlations, possible values range from -1 to +1. This helps to categorize which variable would fall under which factor. Factor / Component - The columns under this heading are the unrotated factors that have been extracted between each component and each variable.

Rotated Component Matrixa Component 2 .796 .692 .231 -.137 .799 .773 .630 -.082 .000

1 Mg Road / Brigade Road Indira nagar/ Old Madras Road Jayanagar/ J.P nagar Koramangala Whitefield Electronic City Outskirts of Bangalore .712 .753 .004 .205 -.365

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 3 iterations.

Analysis: Rotated Factor Matrix - This table contains the rotated factor loadings, which are the correlations between the variable and the factor. Because these are correlations, possible values range from -1 to +1. This matrix helps to categorize the variables to specific factors. Factor - The columns under this heading are the rotated factors that have been extracted. As you can see by the footnote provided by SPSS (a.), three factors were extracted (the two factors that we requested). These are the factors that analysts are most interested in and try to name. For example, the first factor might be called "Cash Cow areas" because items like "Mg Road/ Brigade Road", "Indiranagar / Old Madras", "Jayanagar / JP Nagar" and "Koramangla" load highly on it. Also companies can spend high on investment as well as expect high and definite returns on the same. The second factor might be called "Job Hubs" because items like "Whitefield", "Electronic City" and "Outskirts of Bangalore" load highly on it.

Component Transformation Matrix Compo nent 1

1 2

.994 .108

-.108 .994

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

Analysis: Factor Transformation Matrix - This is the matrix by which you multiply the unrotated factor matrix to get the rotated factor matrix.

Thus the two factors are - 'Cash Cow' Areas and Job Hubs