mba2216 week 11 data analysis part 03 appendix
DESCRIPTION
Multivariate analysisTRANSCRIPT
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Data Analysis Part 3 : Appendix:
Multivariate Analysis
Data Analysis Part 3 : Appendix:
Multivariate Analysis
MBA2216 BUSINESS RESEARCH PROJECT
byStephen Ong
Visiting Fellow, Birmingham City University, UKVisiting Professor, Shenzhen University
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1. Explain what multivariate analysis is and when its application is appropriate.
2. Define and discuss the specific techniques included in multivariate analysis.
3. Determine which multivariate technique is appropriate for a specific research problem.
4. Discuss the nature of measurement scales and their relationship to multivariate techniques.
5. Describe the conceptual and statistical issues inherent in multivariate analyses.
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LEARNING OUTCOMESLEARNING OUTCOMES
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What is it? Multivariate Data Analysis = all statistical methods that simultaneously analyze multiple measurements on each individual or object under investigation.
Why use it? Measurement Explanation & Prediction Hypothesis Testing
What is Multivariate Analysis?
What is Multivariate Analysis?
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The Variate Measurement Scales
Nonmetric Metric
Multivariate Measurement Measurement Error Types of Techniques
Basic Concepts of Multivariate Analysis
Basic Concepts of Multivariate Analysis
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The variate is a linear combination of variables with empirically determined weights.
Weights are determined to best achieve the objective of the specific multivariate technique.
Variate equation:
(Y’) = W1 X1 + W2 X2 + . . . + Wn Xn
Each respondent has a variate value (Y’). The Y’ value is a linear combination of the entire set of
variables. It is the dependent variable. Potential Independent Variables:
X1 = income
X2 = education
X3 = family size
X4 = ??
The VariateThe Variate
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Types of Data and Measurement Scales
Data
Metricor
Quantitative
Nonmetricor
Qualitative
Nominal
Scale
Ordinal
Scale
IntervalScale
RatioScale
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NonmetricNominal – size of number is not related to the amount of the
characteristic being measuredOrdinal – larger numbers indicate more (or less) of the
characteristic measured, but not how much more (or less). Metric
Interval – contains ordinal properties, and in addition, there are equal differences between scale points.
Ratio – contains interval scale properties, and in addition, there is a natural zero point.
NOTE: The level of measurement is critical in determining the appropriate multivariate technique to use!
Measurement ScalesMeasurement Scales
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• All variables have some error. What are the sources of error?
• Measurement error = distorts observed relationships and makes multivariate techniques less powerful.
• Researchers use summated scales, for which several variables are summed or averaged together to form a composite representation of a concept.
Measurement ErrorMeasurement Error
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In addressing measurement error, researchers evaluate two important characteristics of measurement:
• Validity = the degree to which a measure accurately represents what it is supposed to.
• Reliability = the degree to which the observed variable measures the “true” value and is thus error free.
Measurement ErrorMeasurement Error
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Type I error, or , is the probability of rejecting the null hypothesis when it is true.
Type II error, or , is the probability of failing to reject the null hypothesis when it is false.
Power, or 1-, is the probability of rejecting the null hypothesis when it is false.
H0 true H0 false
Fail to Reject H0 1- Type II error
Reject H0
Type I error1-
Power
Statistical Significance and Power
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Effect size: the actual magnitude of the effect of interest (e.g., the difference between means or the correlation between variables).
Alpha (): as is set at smaller levels, power decreases. Typically, = .05.
Sample size: as sample size increases, power increases. With very large sample sizes, even very small effects can be statistically significant, raising the issue of practical significance vs. statistical significance.
Power is Determined by Three Factors
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Impact of Sample Size on Power
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Rules of Thumb 1–1
Statistical Power Analysis• Researchers should always design the study to
achieve a power level of .80 at the desired significance level.
• More stringent significance levels (e.g., .01 instead of .05) require larger samples to achieve the desired power level.
• Conversely, power can be increased by choosing a less stringent alpha level (e.g., .10 instead of .05).
• Smaller effect sizes always require larger sample sizes to achieve the desired power.
• Any increase in power is most likely achieved by increased sample size.
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Dependence techniques: a variable or set of variables is identified as the dependent variable to be predicted or explained by other variables known as independent variables.
o Multiple Regressiono Multiple Discriminant Analysiso Logit/Logistic Regressiono Multivariate Analysis of Variance (MANOVA)
and Covarianceo Conjoint Analysiso Canonical Correlationo Structural Equations Modeling (SEM)
Types of Multivariate Techniques
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Interdependence techniques: involve the simultaneous analysis of all variables in the set, without distinction between dependent variables and independent variables.
o Principal Components and Common Factor Analysis
o Cluster Analysiso Multidimensional Scaling (perceptual
mapping)o Correspondence Analysis
Types of Multivariate Techniques
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Selecting a Multivariate Technique
1. What type of relationship is being examined – dependence or interdependence?
2. Dependence relationship: How many variables are being predicted? What is the measurement scale of
the dependent variable? What is the measurement scale of
the predictor variable?3. Interdependence relationship: Are you
examining relationships between variables, respondents, or objects?
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Two Broad Types of Multivariate Methods:
1. Dependence – analyze dependent and independent variables at the same time.
2. Interdependence – analyze dependent and independent variables separately.
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MultipleRegression
and Conjoint
DiscriminantAnalysis
and Logit
MANOVAand
Canonical
CanonicalCorrelati
on,Dummy
Variables
Metric Nonmetric Metric Nonmetric
Metric
Nonmetric
FactorAnalysis
ClusterAnalysis
NonmetricMDS and
Correspon-dence
Analysis
Selecting the Correct Multivariate Method
SEM CFA
SeveralDependentVariables
OneDependent
Variable
MetricMDS
MultivariateMethods
DependenceMethods
InterdependenceMethods
MultipleRelationships -
StructuralEquations
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Multiple
Regression. . . a single metric dependent
variable is predicted by
several metric independent
variables.
Y
X1
X2
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Discriminant Analysis
• What is it?
. . . single, non-metric (categorical) dependent variable is predicted by several metric independent variables.
• Why use it? Examples of Dependent Variables:• Gender – Male vs. Female• Culture – USA vs. Outside USA
• Purchasers vs. Non-purchasers• Member vs. Non-Member• Good, Average and Poor Credit Risk
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Logistic Regression
A single nonmetric dependent
variable is predicted by several
metric independent variables. This
technique is similar to discriminant
analysis, but relies on calculations
more like regression.
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MANOVA
Several metric dependent
variables
are predicted by a set of
nonmetric (categorical)
independent variables.
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CANONICAL ANALYSIS
Several metric dependent variables
are predicted by several metric
independent variables.
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. . . is used to understand respondents’ preferences for products and services.
In doing this, it determines the
importance of both:
attributes and
levels of attributes
. . . based on a smaller subset of combinations of
attributes and levels.
CONJOINT ANALYSIS
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Typical Applications: Soft Drinks Candy Bars Cereals Beer Apartment Buildings;
Condos Solvents; Cleaning
Fluids
CONJOINT ANALYSIS
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Structural Equations Modeling
(SEM)Estimates multiple, interrelated dependence relationships based on two components:
1.Measurement Model
2.Structural Model
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Exploratory Factor Analysis
. . . analyzes the structure of the interrelationships among a large number of variables to determine a set of common underlying dimensions (factors).
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. . . groups objects (respondents, products, firms, variables, etc.) so that each object is similar to the other objects in the cluster and different from objects in all the other clusters.
Cluster Analysis
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Cluster Analysis of “Eating Out” Questions
1. I eat at fast food restaurants at least once a week.
2. I prefer restaurants with the highest quality food.
3. I prefer restaurants that have quick service.
4. I prefer to eat at restaurants that have a nice atmosphere. Objective: Identify groups that maximize
ratio of
between groups variance large within groups variance small
=
1 7
7-point Agree/Disagree Scale
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Constructs . . .
Trust Commitment Cooperation Locus of Control Job Satisfaction Turnover
High
Medium
Low
Organizational
Commitment
Example: Cluster Analysis . . .
“Polar Extremes”= remove middle
group(s)
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Multidimensional Scaling
. . . identifies “unrecognized” dimensions that affect purchase behaviour based on customer judgments of:
• similarities or• preferences
and transforms these into distances represented as perceptual maps.
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Correspondence Analysis . . . uses non-metric data
and evaluates either linear or
non-linear relationships in an
effort to develop a perceptual
map representing the
association between objects
(firms, products, etc.) and a
set of descriptive
characteristics of the objects.
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Copyright © 2010 Pearson Education, Inc., publishing
as Prentice-Hall.1-34
o Establish Practical Significance as well as Statistical Significance.
o Sample Size Affects All Results.o Know Your Data.o Strive for Model Parsimony.o Look at Your Errors.o Validate Your Results.
Guidelines for Multivariate Analysis
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Stage 1: Define the Research Problem, Objectives, and
Multivariate Technique(s) to be Used
Stage 2: Develop the Analysis PlanStage 3: Evaluate the Assumptions Underlying the
Multivariate Technique(s)Stage 4: Estimate the Multivariate Model and Assess
Overall Model Fit
Stage 5: Interpret the Variate(s)
Stage 6: Validate the Multivariate Model
A Structured Approach to Multivariate Model Building:
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Variable Description Variable TypeData Warehouse Classification VariablesX1 Customer Type nonmetric X2 Industry Type nonmetric X3 Firm Sizenonmetric X4 Region nonmetricX5 Distribution SystemnonmetricPerformance Perceptions VariablesX6 Product Quality metricX7 E-Commerce Activities/WebsitemetricX8 Technical Support metricX9 Complaint ResolutionmetricX10 Advertising metricX11 Product Line metricX12 Salesforce Image metricX13 Competitive PricingmetricX14 Warranty & ClaimsmetricX15 New Products metricX16 Ordering & BillingmetricX17 Price Flexibility metricX18 Delivery Speed metricOutcome/Relationship MeasuresX19 Satisfactionmetric X20 Likelihood of Recommendationmetric X21 Likelihood of Future Purchasemetric X22 Current Purchase/Usage Levelmetric X23 Consider Strategic Alliance/Partnership in Futurenonmetric
Description of HBAT Primary Database Variables
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Further Reading COOPER, D.R. AND SCHINDLER, P.S. (2011)
BUSINESS RESEARCH METHODS, 11TH EDN, MCGRAW HILL
ZIKMUND, W.G., BABIN, B.J., CARR, J.C. AND GRIFFIN, M. (2010) BUSINESS RESEARCH METHODS, 8TH EDN, SOUTH-WESTERN
SAUNDERS, M., LEWIS, P. AND THORNHILL, A. (2012) RESEARCH METHODS FOR BUSINESS STUDENTS, 6TH EDN, PRENTICE HALL.
SAUNDERS, M. AND LEWIS, P. (2012) DOING RESEARCH IN BUSINESS & MANAGEMENT, FT PRENTICE HALL.