What is Cluster Analysis?
Cluster analysis is a statistical technique used to group cases (individuals or objects) into homogeneous sub-groups based on responses to variables. Using PASW (SPSS) 17.0 to conduct a cluster analysis, there are three clustering procedures: two-step, k-means, and hierarchical.
Two-step clustering handles large datasets and continuous and categorical variables (this is the only clustering procedure that allows for a mixture of variables). In the first step, cases are assigned into pre-clusters and these pre-clusters are treated as single cases in the second step. In the second step, the hierarchical algorithm is used to cluster the pre-clusters. You can allow the two-step algorithm to determine the number of clusters or you can specify the number of clusters.
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