Panel data is widely used in modeling on economic problems because it can describe the object＇s dynamic characters from time and cross-section in two-dimensional space. This paper reduces dimension of panel data by the means of principal component analysis, then uses cluster analysis on the panel data through similarity indexes which describe the comprehensive sequential evaluation matrix, lastly puts forward the effective research approaches on the panel data＇ s affinities. After that the authors use this algorithm to analyze the regional ca...
