Using the SPSS Housing Dataset, carry out a factor analysis on the price of a property and its regions percentage of persons younger than 15, percentage of persons older than 65, unemployment rate, owner occupied rate, and number of cars per household. Describe the rotated factor loadings, and and identify the most important variables that comprise each factor.

What will be an ideal response?

Using SPSS to carry out the factor analysis, we get a total of two significant components with

eigenvalues above 1.





These components are characterized as follows:

Factor 1 has a heavy loading on the percentage of persons younger than 15 and the percentage of

persons 65 and older. It is the “age” factor.

Factor 2 has heavier loading on the number of cars per household, with a lighter loading on the

unemployment rate.