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Validity and Reliability Using Factor Analysis and Cronbach's Alpha

Factor analysis is a statistical technique used to analyze interrelationships among variables and reduce a large set of variables into a smaller set of underlying factors. It can help identify underlying dimensions that explain correlations among variables. Exploratory factor analysis is used to group variables, while confirmatory factor analysis tests whether measured variables represent certain constructs. Factor analysis outputs include factor loadings, eigenvalues, factor scores, and statistics like Bartlett's test and Cronbach's alpha that measure sampling adequacy and internal consistency.

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128 views35 pages

Validity and Reliability Using Factor Analysis and Cronbach's Alpha

Factor analysis is a statistical technique used to analyze interrelationships among variables and reduce a large set of variables into a smaller set of underlying factors. It can help identify underlying dimensions that explain correlations among variables. Exploratory factor analysis is used to group variables, while confirmatory factor analysis tests whether measured variables represent certain constructs. Factor analysis outputs include factor loadings, eigenvalues, factor scores, and statistics like Bartlett's test and Cronbach's alpha that measure sampling adequacy and internal consistency.

Uploaded by

Cinderella Meilani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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CONVERGENT AND DISCRIMINANT

VALIDITY (FACTOR ANALYSIS), AND


INTERNAL CONSISTENCY (CRONBACH’S
ALPHA)
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FACTOR ANALYSIS

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Description
• Factor analysis is a general name denoting a class of procedures primarily
used for data reduction and summarization.

• In marketing research, there may be a large number of variables, most of


which are correlated and which must be reduced to a manageable level.

• Relationships among sets of many interrelated variables are examined


and represented in terms of a few underlying factors.

• For example, the behavioral performance of salespeople may be


measured by asking them to evaluate their own behavioral performance
on a series of items on a semantic differential scale or a Likert scale.
These item evaluations may then be analyzed to determine the factors
underlying their behavioral performance.

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Factor analysis is used in the following
circumstances:
• To identify underlying dimensions, or factors, that
explain the correlations among a set of variables.

• To identify a new, smaller set of uncorrelated variables


to replace the original set of correlated variables in
subsequent multivariate analysis (regression or
discriminant analysis).

• To identify a smaller set of salient variables from a


larger set for use in subsequent multivariate analysis.
4
Applications of Factor analysis in Marketing
• It can be used in market segmentation for identifying the
underlying variables on which to group the customers.

• In product research, factor analysis can be employed to


determine the brand attributes that influence consumer choice.

• In advertising studies, factor analysis can be used to


understand the media consumption habits of the target market.

• In pricing studies, it can be used to identify the characteristics


of price-sensitive consumers.

5
Factor Analysis Model

F1 F2

A11

X1 X2 X3 X4 X5 X6

V1
U1 U2 U3 U4 U5 U6

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Factor Analysis Model

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Factor Analysis Model

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EXPLORATORY FACTOR ANALYSIS

FACTOR A FACTOR B

A1 A2 A3 B1 B2 B3

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CONFIRMATORY FACTOR ANALYSIS

FACTOR A FACTOR B

A1 A2 A3 B1 B2 B3

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Statistics Associated with Factor Analysis

• Bartlett’s test of sphericity. Bartlett’s test of sphericity is a test statistic used to


examine the hypothesis that the variables are uncorrelated in the population. In other
words, the population correlation matrix is an identity matrix; each variable
correlates perfectly with itself but has no correlation with the other variables .

• Correlation matrix. A correlation matrix is a lower triangle matrix showing the


simple correlations, r, between all possible pairs of variables included in the analysis.
The diagonal elements, which are all 1, are usually omitted.

• Communality. Communality is the amount of variance a variable shares with all the
other variables being considered. This is also the proportion of variance explained by
the common factors.

• Eigenvalue. The eigenvalue represents the total variance explained by each factor.

• Factor loadings. Factor loadings are simple correlations between the variables and
the factors

11
Statistics Associated with Factor Analysis

• Factor loading plot. A factor loading plot is a plot of the original variables using the
factor loadings as coordinates.

• Factor matrix. A factor matrix contains the factor loadings of all the variables on all
the factors extracted.

• Factor scores. Factor scores are composite scores estimated for each respondent on
the derived factors.

• Factor scores coefficient matrix. This matrix contains the weights, or factor score
coefficients, used to combine the standardized variables to obtain factor scores.

• Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy. The Kaiser-Meyer-


Olkin (KMO) measure of sampling adequacy is an index used to examine the
appropriateness of factor analysis. High values (between 0.5 and 1.0) indicate factor
analysis is appropriate. Values below 0.5 imply that factor analysis may not be
appropriate.

12
Statistics Associated with Factor Analysis

• Percentage of variance. This is the percentage of the total variance attributed to each
factor.

• Residuals. Residuals are the differences between the observed correlations, as given
in the input correlation matrix, and the reproduced correlations, as estimated from
the factor matrix.

• Scree plot. A scree plot is a plot of the eigenvalues against the number of factors in
order of extraction.

13
Conducting Factor
Analysis

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N0 Items Responses
Ad1 I am sensitive to the needs of my customers. 1 2 3 4 5

Ad2 I find it easy to adapt my style to suit my 1 2 3 4 5


customers.

Ad3 I try to understand how one customer differs 1 2 3 4 5


from another and vary my approach accordingly.

Ad4 I feel confident that I can change my approach 1 2 3 4 5


when necessary.
Ad5 Every customer requires a unique approach. 1 2 3 4 5

Se1 I have all the technical knowledge I need to deal 1 2 3 4 5


with my job
Se2 I did not experience problems adjusting to work 1 2 3 4 5
at my organization.
Se3 I know that I will be able to perform successfully 1 2 3 4 5
in my organization.
Se4 My job is well within the scope of my ability. 1 2 3 4 5

Se5 I can handle a more challenging job than the one I 1 2 3 4 5


have now.
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No Items Responses
Rc1 There is no conflict between my work 1 2 3 4 5
role and my personal values. (-)
Rc2 There is no conflict between my work 1 2 3 4 5
role and my personal needs. (-)
There is no conflict between my
Rc3 expectation and my customer’s 1 2 3 4 5
expectation. (-)
There is no conflict between my
Rc4 expectation and my supervisor’s 1 2 3 4 5
expectation. (-)
Rc5 There is no conflict between my role in 1 2 3 4 5
my job and my role in my family. (-)
Rc6 There is no conflict between my role in 1 2 3 4 5
the job and my role in society. (-)

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Data: Survey Data

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CONVERGENT AND DISCRIMINANT VALIDITY USING
FACTOR ANALYSIS

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RELIABILITY: INTERNAL CONSISTENCY AND
CRONBACH’S ALPHA

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THANK YOU

35

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