Research Methodology - Dr. Krishan K. Pandey

Multivariate Analysis Techniques 329
Variables Factor loadings Communality (h 2 )
Centroid Factor Centroid Factor
A B
Eigen value
(Variance
accounted for i.e., 3.490 2.631 6.121
common variance)
Proportion of total .44 .33 .77
variance (44%) (33%) (77%)
Proportion of .57 .43 1.00
common variance (57%) (43%) (100%)
Each communality in the above table represents the proportion of variance in the corresponding
(row) variable and is accounted for by the two factors (A and B). For instance, 79.7% of the variance
in variable one is accounted for by the centroid factor A and B and the remaining 20.3% of the total
variance in variable one scores is thought of as being made up of two parts: a factor specific to the
attribute represented by variable one, and a portion due to errors of measurement involved in the
assessment of variable one (but there is no mention of these portions in the above table because we
usually concentrate on common variance in factor analysis).
It has become customary in factor analysis literature for a loading of 0.33 to be the minimum
absolute value to be interpreted. The portion of a variable’s variance accounted for by this minimum
loading is approximately 10%. This criterion, though arbitrary, is being used more or less by way of
convention, and as such must be kept in view when one reads and interprets the multivariate research
results. In our example, factor A has loading in excess of 0.33 on all variables; such a factor is usually
called “the general factor” and is taken to represent whatever it is that all of the variables have in
common. We might consider all the eight variables to be product of some unobserved variable (which
can be named subjectively by the researcher considering the nature of his study). The factor name is
chosen in such a way that it conveys what it is that all variables that correlate with it (that “load on
it”) have in common. Factor B in our example has all loadings in excess of 0.33, but half of them are
with negative signs. Such a factor is called a “bipolar factor” and is taken to represent a single
dimension with two poles. Each of these poles is defined by a cluster of variables—one pole by those
with positive loadings and the other pole with negative loadings.
We can give different names to the said two groups to help us interpret and name factor B. The
rows at the bottom of the above table give us further information about the usefulness of the two
factors in explaining the relations among the eight variables. The total variance (V) in the analysis is
taken as equal to the number of variables involved (on the presumption that variables are standardized).
In this present example, then V = 8.0. The row labeled “Eigen value” or “Common variance” gives
the numerical value of that portion of the variance attributed to the factor in the concerning column
above it. These are found by summing up the squared values of the corresponding factor loadings.
Thus the total value, 8.0, is partitioned into 3.490 as eigen value for factor A and 2.631 as eigen value
for factor B and the total 6.121 as the sum of eigen values for these two factors. The corresponding
proportion of the total variance, 8.0, are shown in the next row; there we can notice that 77% of the