Principal Component Analysis - Statistical Method of Territorial Profile Factor Analysis

9 Pages Posted: 24 May 2007

See all articles by Mariana-Elena Voineagu Balu

Mariana-Elena Voineagu Balu

Spiru Haret University

Felix Furtuna

Bucharest Academy of Economic Studies

Date Written: November 2006

Abstract

The purpose of factor analysis is to select from a large number of random variables, a reduced number of factors which provide the possibility to more exactly and more complexly establish the interdependences. The principal component analysis is based on a rigorous mathematical instrument, which does not take into consideration any of the arbitrary elements or subjective decisions. The principal component analysis has to determine the eigen dominant valuation - method known under the name of "Hotelling's deflator method", where to find out the eigen values means to determine the joint factors.

Keywords: factor analysis, principal component analysis, dominant eigen value, Hotelling's deflator method

JEL Classification: C10

Suggested Citation

Balu, Mariana-Elena Voineagu and Furtuna, Felix, Principal Component Analysis - Statistical Method of Territorial Profile Factor Analysis (November 2006). Available at SSRN: https://ssrn.com/abstract=988300 or http://dx.doi.org/10.2139/ssrn.988300

Mariana-Elena Voineagu Balu (Contact Author)

Spiru Haret University ( email )

Splaiul Independentei no. 313
Sector 6
Bucharest
Romania

Felix Furtuna

Bucharest Academy of Economic Studies ( email )

6, Romana Square, District 1
Bucharest, 010374
Romania

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