Factor Analysis as a Tool for Survey Analysis

Abstract

Factor analysis is particularly suitable to extract few factors from the large number of related variables to a more manageable number, prior to using them in other analysis such as multiple regression or multivariate analysis of variance. It can be beneficial in developing of a questionnaire. Sometimes adding more statements in the questionnaire fail to give clear understanding of the variables. With the help of factor analysis, irrelevant questions can be removed from the final questionnaire. This study proposed a factor analysis to identify the factors underlying the variables of a questionnaire to measure tourist satisfaction. In this study, Kaiser-Meyer-Olkin measure of sampling adequacy and Bartlett’s test of Sphericity are used to assess the factorability of the data. Determinant score is calculated to examine the multicollinearity among the variables. To determine the number of factors to be extracted, Kaiser’s Criterion and Scree test are examined. Varimax orthogonal factor rotation method is applied to minimize the number of variables that have high loadings on each factor. The internal consistency is confirmed by calculating Cronbach’s alpha and composite reliability to test the instrument accuracy. The convergent validity is established when average variance extracted is greater than or equal to 0.5. The results have revealed that the factor analysis not only allows detecting irrelevant items but will also allow extracting the valuable factors from the data set of a questionnaire survey. The application of factor analysis for questionnaire evaluation provides very valuable inputs to the decision makers to focus on few important factors rather than a large number of parameters.