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You asked: Can you explain how k-means clustering works?
K-means clustering is a non-hierarchical procedure that works along the following steps:
- Select K observations as initial cluster centroids (seeds).
- Assign each observation to the cluster that has the closest centroid (for example, in Euclidean sense).
- When all observations have been assigned, recalculate the positions of the K centroids.
- Repeat until the cluster centroids no longer change.
A key requirement here is that the number of clusters, K, needs to be specified before the start of the analysis. It is also advised to try out different seeds to verify the stability of the clustering solution. This decision can be made using expert-based input or based on the result of another (e.g., hierarchical) clustering procedure. Typically, multiple values of K are tried out and the resulting clusters evaluated in terms of their statistical characteristics and interpretation. It is also advised to try out different seeds to verify the stability of the clustering solution.