A market research institute studied the relationship between income and personal satisfaction. They used hierarchical clustering to analyse their data.

(a) Assume you decide for a four-cluster solution. Circle the four clusters in the Fig. 12.21.

(b) Characterize the contents of the four clusters.

(c) Assume you decide for a five-cluster solution. Circle the five clusters into Fig. 12.21.

(d) Which approach makes the most sense from a methodological standpoint?

(e) Now, the market research institute used k-means clustering to analyse their data.

Please interpret the table final cluster centres in Fig. 12.22. What is the difference between the three-cluster solution of the hierarchical and the k-means approach?

Figure 12.21

Figure 12.22

Transcribed Image Text:

Personal Satisfaction 5 A ♡ ~ T 0 T L 1- 500 9 3 AA 1000 13 a 1500 ao 8 18 a o 14 Ở 08 an 2 ao D 6 15 2000 Income [in Euro] 2500 16 17 o 12 a 3000 10 7 A 3500