Statistics can be confusing as the term “factor” can have different meanings. The definition of factor in statistics programming languages such as R as an adjective. It is used synonymously with category – a variable does the same thing as a variable. These factor variables are levels. They are the same as categories. A factor variable doesn’t have factors; it has categories. A subset of categorical variables that is important and special is binary (yes-no) variables. Also known as indicator variables. Binary variables can refer to natural 0/1 categories (buy or no-buy; cure or no-cure); or they can be dummy variables that are made out of multi-category variables, where each category gets its dummy. This indicates whether a record is in that category.
Statistics modeling uses the factor synonymously with the predictor variable. This is especially true when it comes to fixed and random effect modeling. Factors (variables are either fixed elements or random factors.
An input variable being studied in an experiment or ANOVA. Factor analysis can be used to reduce large numbers of variables into smaller numbers. This technique takes the maximum common variance of all variables and converts it into a common score. This score can be used to further analyze the variables. general linear modeling (GLM) includes factor analysis. This method assumes several assumptions. There is a linear relationship, no multicollinearity. It also includes relevant variables in the analysis and there is a true correlation between variables. There are many methods, but the most popular is principal component analysis.
Statistics Factor definition can be confused in much the same way hierarchical or beta is, as it has different meanings depending on its context. However, the factor might be more confusing because of its related meanings.
A factor can be used in both senses to mean a variable. A factor can have a totally different meaning depending on the context.
Factor in Factor Analysis
A factor in statistics factor analysis is an unmeasured variable that expresses itself through the relationship it has with other variables.
Let’s take, for instance, leadership as a variable. It is possible to measure the leadership style of an individual or organization, but it would be difficult to do so using one variable. Although it is a single concept, it is too abstract and multifaceted.
Instead, you might need to create a scale with multiple items that measure leadership. It is possible that there is an unmeasurable factor called leadership that causes people’s responses to be certain on the various items.
Factor analysis analyzes these responses to find the underlying factor. You can also use factor analysis to generate what are known as factor scores. These are a single score for each factor.
Factor scores are great because you can use one variable to measure the factor in other analyses instead of a whole set.