Using independent component analysis for feature extraction and multivariate data projection

Andreas Weingessel, Martin Natter, Kurt Hornik

Publikation: Working/Discussion PaperWU Working Paper

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Abstract

Deriving low-dimensional perceptual spaces from data consisting of many variables is of crucial interest in strategic market planning. A frequently used method in this context is Principal Components Analysis, which finds uncorrelated directions in the data. This methodology which supports the identification of competitive structures can gainfully be utilized for product (re)positioning or optimal product (re)design. In our paper, we investigate the usefulness of a novel technique, Independent Component Analysis, to discover market structures. Independent Component Analysis is an extension of Principal Components Analysis in the sense that it looks for directions in the data that are not only uncorrelated but also independent. Comparing the two approaches on the basis of an empirical data set, we find that Independent Component Analysis leads to clearer and sharper structures than Principal Components Analysis. Furthermore, the results of Independent Component Analysis have a reasonable marketing interpretation.

Publikationsreihe

ReiheWorking Papers SFB "Adaptive Information Systems and Modelling in Economics and Management Science"
Nummer16

WU Working Paper Reihe

  • Working Papers SFB \Adaptive Information Systems and Modelling in Economics and Management Science\

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