1.

Assignment

To solve these questions please read chapter 5 in Applied Multivariate

Techniques by Subhash Sharma

1.
a) Please examine the all continuous variables in the HBAT dataset using histogram,
skewness, and normality analysis.
b) What is the value of correlation and partial correlation coefficients in measuring
relationships between continuous variables?
c) Which variable individually, X6 - X18, is a better predictor of Customer
Satisfaction? Explain.
d) What would you expect the relationship between Customer Satisfaction and each
of the categorical variables to be (i.e. positive or negative)? Explain.
e) Analyze this data using principal component analysis, using the varimax rotation
procedure.
f) Interpret the factors extracted.
g) Calculate the factor scores for each respondent.
h) Examine the model fit.
i) Operarationalize the each constructs to measure their reliability

2. Consider the five indicator single-factor model represented by the following

equations:

V = 0.65 * F1 + UV
W = 0.84 * F1 + UW
X = 0.70 * F1 + UX
Y = 0.32 * F1 + UY
Z = 0.28 * F1 + UZ

a) What are the pattern loadings for indicators V, X and Z?

b) Show a graphical representation of the model. Indicate the pattern loadings in
your representation.
c) Compute the communalities of the indicators with the common factor F1.
d) What are the unique variances associated with each indicators?
e) Compute the correlations between the following set of indicators:
a. V, W
b. W,X
c. W,Z
d. Y,Z
f) What is the shared variance between each indicator and the common factor?
g) What percentage of the total shared variance is due to indicators V, W, and X?

3. The correlations matrix for a hypothetical data set is given in Tablo1.

TABLE1
X1 X2 X3 X4
X1 1.000
X2 0.690 1.000
X3 0.280 0.255 1.000
X4 0.350 0.195 0.610 1.000

The following estimated factor loadings were extracted by the principal axis factoring
procedure:

F1 F2
X1 0.80 0.20
X2 0.70 0.15
X3 0.10 0.90
X4 0.20 0.70

Compute and discuss the following:

a) Specific variance
b) Communalities
c) Proportion of variance explained by each factor
d) Estimated or reproduced correlation matrix
e) Residual matrix