“A frequently applied paradigm in analyzing data from multivariate observations is to model the relevant information (represented in a multivariate variable X) as coming from a limited number of latent factors. In a survey on household consumption, for example, the consumption levels, X, of p different goods during one month could be observed. The variations and covariations of the p components of X throughut the survey might in fact be explained by two or three main social behavioral factors of the household…These unobserved factors are much more interesting to the social scientist than the observed quantitative measures (X) themselves, because they give a better understanding of the behavior of households.
“How can we provide a statistical model addressing these issues and how can we interpret the obtained model? This is the aim of factor analysis.” (p. 276)
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