Multivariate Data AnalysisChapter 9 - Cluster Analysis.ppt

Multivariate Data AnalysisChapter 9 - Cluster Analysis Section 3: Independence Techniques Chapter 9 What Is Cluster Analysis (Q analysis)? Define groups of homogeneous objects (i.e., individuals, firms, products, or behaviors) Maximize the homogeneity of objects within the clusters while also maximize the heterogeneity between clusters Segmentation and target marketing Compare with Factor Analysis How Does Cluster Analysis Work? Measuring Similarity (Euclidean distance) Forming Clusters (hierarchical procedure vs. agglomerative method) Determining the Number of Clusters in the Final Solution (entropy group) Cluster Analysis Decision Process Stage One: Objectives of Cluster Analysis Taxonomy description Data simplification Relationship identification Selection of Clustering Variables Characterize the objects being clustered Relate specifically to the objectives of the cluster analysis Cluster Analysis Decision Process (Cont.) Stage 2: Research Design in Cluster Analysis Detecting Outliers Similarity Measures (Interobject similarity) Correlational Measures Distance Measures Comparison to Correlational Measures Types of Distance Measures (Euclidean distance) Impact of Unstandardized Data Values (Mahalonobis Distance, D2) Association Measures Standardizing the Data Standardizing By Variables (normalized distance function) Standardizing By Observation (within-case vs. row-centering standarlization) Cluster Analysis Decision Process (Cont.) Stage 3: Assumptions in Cluster Analysis Representativeness of the Sample Impact of Multicollinearity Cluster Analysis Decision Process (Cont.) Stage 4: Deriving Clusters and Assessing Overall Fit Clustering Algorithms Hierarchical Cluster Procedures Single Linkage Complete Linkage Average Linkage Wards Method Centroid Method Nonhierarchical Clustering Procedures Sequential Threshold Parallel Threshold Optimization Selecting Seed Points Should Hierarchical or Nonhierarchical Methods Be Used? Pros and Con