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Chapter 93. The VARCLUS Procedure > Getting Started: VARCLUS Procedure - Pg. 7455

Getting Started: VARCLUS Procedure ! 7455 The procedure stops splitting when either of the following conditions holds: The number of clusters is greater than or equal to the maximum number of clusters as speci- fied by the MAXCLUSTERS= option is reached. Every cluster satisfies the stopping criteria specified by the PROPORTION= (percentage of variation explained) and/or the MAXEIGEN= (second eigenvalue) options. By default, VARCLUS stops splitting when every cluster has only one eigenvalue greater than one, thus satisfying the most popular criterion for determining the sufficiency of a single underlying dimension. The iterative reassignment of variables to clusters proceeds in two phases. The first is a nearest component sorting (NCS) phase, similar in principle to the nearest centroid sorting algorithms de- scribed by Anderberg (1973). In each iteration, the cluster components are computed, and each variable is assigned to the component with which it has the highest squared correlation. The sec- ond phase involves a search algorithm in which each variable is tested to see if assigning it to a different cluster increases the amount of variance explained. If a variable is reassigned during the search phase, the components of the two clusters involved are recomputed before the next variable is tested. The NCS phase is much faster than the search phase but is more likely to be trapped by a local optimum.