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Example 1
Examples
What is DA
This is a multivariate technique, which analyses reasons for the a-priori existence of well-defined and distinct groups of
Example 2
X X
Example 3
nominal
interval interval
interval
nominal ratio nominal nominal
X X X
Gender
Age (in years) Age group Occupation
Example 3 Comment on the data collected by a researcher for DA as Dependent variable Group 1 employees - new premises for our office is essentials Group 2 employees this old premise is good enough for now Predictor variables Employee name Group Age Tenure Need for Infrastructure Designation matters a lot
years
rate 1 to 7
rate 1 to 4
Selone
Elishia
young
2.5
programmer
midage
4.7
manager
Caution
age group
Discrete
Continuous
number of children
Discrete
Discrete
Caution: Usually the independent variables used in RA and DA are correlated quite highly among themselves (problem of Multicollinearity
Working of DA Rather than relying on each predictor variable as a separate measure of understanding the difference between the 2 groups, we want a combination of the predictor variables. Every predictor variable may not be equally important for the purpose of distinguishing between the 2 groups. So, we take a weighted combination of the predictor variables.
Discriminant function
Example 4 Case Study Why not a holiday? Dependent variable categorical Predictor variables Some say Yes, a good annual holiday is a must Others say Holiday is not essential Family size (X1) Annual Household income, Rs. lakhs (X2) Average age (in years) of children (X3)
Ratio scaled
Interval scaled Data Group Total
Analysis sample
7 8
Data Groups Yes Yes Yes Family size (X1) 4 5 3 Annual Household income, Average age of Rs. lakhs (X2) children (X3) 10 8 7 3 4 2
No
No Yes Yes No
1
2 4 3 2
5
8 12 7 8
2
6 5 8 6
No
No No Yes No Yes
2
4 2 4 3 5
6
9 12 15 10 8
7
6 9 10 4 5
Objectives of DA Univariate ANOVA 1. For every predictor variable - determine if significant differences exist between the two groups. Boxs M test 2. Tests the equality of population covariance matrices of 2 groups.
4. Tests equality of population mean vectors of Discriminant scores of 2 groups . Wilks test
Structure matrix 5. Identify the relative importance of each of the predictor variables in predicting group membership.
6. Find the accuracy of the prediction of group-members using Discriminant scores. Classification matrix - Hit ratio 7. Enable future unidentified individuals to be classified to their correct group (classification) with a better than chance accuracy.
Univariate ANOVA
Wilks'
Members in family
F
13.091
df1
1
df2
12
Sig.
0.004 < 0.05 reject H0
0.478
0.797
12
0.390
0.992
0.100
12
0.757
Boxs M Test
1.540 0.186 6 1043.321 0.981 >> 0.05 (level in significance) Accept H0 Population covariance matrices of two groups are significantly equal one of basic assumptions of DA is valid S1 S2
H0: S 1 = S 2
H 1: S 1 S 2
Summary of Canonical Discriminant Functions Function Eigenvalues % of variance Cumulative % 1 1.116 100.0 100.0 Canonical correlation 0.726
Wilks test
m1 ~
df 3 sig. 0.049 < 0.05
m2 ~
2 7.871
m1 = m 2 ~ ~ m1 m 2 ~ ~
Reject H0 the population mean vectors of the D-scores of the two groups are not
H1:
significantly equal
Standardized Canonical Discriminant Function Coefficients Members in family (X1) Annual household income (X2) Average age of children (X3) 0.983 0.054 - 0.174
Discriminant Score (D-score) of a respondent can be found by substituting his/her answers (values of X1, X2, X3) from the data sheet In the above Discriminant Function.
Group Y Y Y N N Y Y N N N N Y N Y
Annual Household Av age of children income (X2) (X3) 10 3 8 4 7 2 5 2 8 6 12 5 7 8 8 6 6 7 r (D-score, X1) = 0.989 9 6 12 9 15 10 10 4 8 5
Discr. Score 1.14429 2.14431 0.04437 -2.21345 -1.32038 1.04636 -0.36933 -1.32038 -1.42929 0.91746 -1.4473 0.76156 -0.03358 2.07536
Members in family (X1) Structure Matrix Annual household income (X2) Average age of children (X3)
-8
-1
+6
3
7 8
Group
Annual HMembers in hold income Av age of family (X1) (X2) children (X3) Discr. Score
Prediction
Y
Y Y N N
4
5 3 1 2
10
8 7 5 8
3
4 2 2 6
1.14429
2.14431 0.04437 -2.21345 -1.32038
Y
Y Y N N
Y
Y N N N
4
3 2 2 4
12
7 8 6 9
5
8 6 7 6
1.04636
-0.36933 -1.32038 -1.42929 0.91746
Y
N N N Y
N
Y N Y
2
4 3 5
12
15 10 8
9
10 4 5
-1.4473
0.76156 -0.03358 2.07536
N
Y N Y
1.00
14.3
85.7
100.0
Example 5
In a 2 group DA of education loan from banks, the following results were obtained.
(a) Will you use all the variables for the DA? Which are the variables you would consider for continuing with the DA? (b) Make the structure matrix and hence identify the variable that contributes most to the intergroup difference. (c) How good is the predictive power of the discriminant function?
0.003
0.061 0.005 0.048
Correlation coefficient between the D scores and individual variables Variables Average age of children Number of children for higher studies Number of household with higher education Monthly income Annual savings correlation coefficient 0.21 0.76 - 0.04 0.62 0.54
Validation sample
15
10
20
14
Example 6
Customers answers: 1) Oh yes! I will invest in MF. 2) Never! I am too scared may be!
Variables Feeling of insecurity Too risky Scale used Interval scale 1 to 7 1 not agree 7 disagree Amount in Rs. Lakhs Actual number Structure matrix 0.822 0.541 Discriminant coefficients 0.743 0.096
0.346
0.213
0.233
0.469
No.of dependents
0.164
0.209
1) What scale has been used for the last two variables?
2) How are the values in the 3rd column computed? What to they convey to you? 3) Find the discriminant score of a person with answers to the variables as: 1, 6, 2, Rs. 4.5 lakhs, 3. 4) What is the following table called? 5) Complete it and thus comment on the goodness of the DA done. Predicted Group Membership
Answer
Yes No
No. of respondents 45
45
Yes
27 12
No
For a fast-food outlet several DA needs to be done - for employees -- for customers
Employees
Grouping/classification variables
3) Gender
4) Age group young or mid-aged 5) Performance good or bad
Interval scale 1 to 7
Relationship variables
1 completely disagree
Loyalty I have a sense of loyalty to Samouels restaurant. 7 completely agree Effort I am willing to put in a great deal of effort beyond that expected to help Samouels restaurant to be successful.
Work environment variables X1 X2 X3 X4 X5 X6 I am paid fairly for the work I do. I am doing the kind of work I want.
Interval scale 1 to 7
1 completely disagree
7 completely agree
My supervisor gives credit an praise for work well done. There is a lot of cooperation among the members of my work group. My job allows me to learn new skills. My supervisor recognizes my potential.
X7
X8 X9 X10 X11 X12
Customer
Restaurant Perceptions X1 X2 Excellent Food Quality Attractive Interior
Selection Factor Rankings X13 X14 X15 X16 X17 X18 X19 X20 X21 Food Quality Atmosphere Prices Employees
X3
X4 X5 X6 X7 X8 X9 X10 X11 X12
Generous Portions
Excellent Food Taste Good Value for the Money Friendly Employees Appears Clean & Neat Fun Place to Go Wide Variety of menu Items Reasonable Prices Courteous Employees Competent Employees
Relationship Variables
Satisfaction Likely to Return in Future Recommend to Friend Frequency of Patronage Length of Time a Customer
Grouping/classification variables X22 X23 X24 Gender Which AD Viewed (no.1, 2 or 3) AD Rating good or bad
X25