Consumer Behavior Research Methods

Factor Analysis

Aim of a Factor Analysis (incl. Pros (3) & Cons (1))

The factor analysis is a technique of data reduction that allows to build a model from raw data:
 
PROS

  • The factor analysis extract factors also called “latent variables” that concentrate the information of a high number of variables – Why “latent”?

  • The aim is therefore to identify an underlying structure of a set of observed variables.

  • This technique studies the interrelations between variables with the aim to find a new smaller set of variables that expresses the commonalities of the original variables

CONS

  • The reduction of the number of variables causes however a loss of information

Diskussion