Article
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Comparison of Correlation Measures for Nominal Data
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Version 1
: Received: 15 April 2020 / Approved: 16 April 2020 / Online: 16 April 2020 (13:30:08 CEST)
A peer-reviewed article of this Preprint also exists.
Islam, T.U. Ranking of Normality Tests: An Appraisal through Skewed Alternative Space. Symmetry 2019, 11, 872. Islam, T.U. Ranking of Normality Tests: An Appraisal through Skewed Alternative Space. Symmetry 2019, 11, 872.
Abstract
In social sciences, a plethora of studies utilize nominal data to establish the relationship between the variables. This, in turn, requires the correct use of correlation technique. The choice of correlation technique depends upon the underlying assumptions and power of the test of significance. The objective of the research is to explore the best measure of association for nominal data in terms of size, power and bias in estimation. Monte Carlo simulations reveal that the Phi and Pearson correlation statistics performs equally well in terms of size, power, and bias for naturally dichotomous variables. When both variables are artificially dichotomized, the Tetrachoric statistic has an edge in terms of bias to Pearson correlation statistic. If one variable is continuous and other is artificially dichotomized, the Biserial correlation measure turns out to be less biased as compared to Pearson statistic although both statistics exhibit similar power and size properties. If one variable is continuous and other is naturally dichotomized, it is hard to choose between the Point Biserial and Pearson correlation measures. Finally, if one variable is naturally dichotomous and other is artificially dichotomized, correlation coefficient V is compared with Pearson, Phi and Tetrachoric correlation techniques in terms of bias in estimate. The results indicate that the Tetrachoric statistic considerably overestimates the correlation value against non-normal distributions. Pearson and Phi correlation slightly underestimate the correlation value. In contrast, the correlation statistic V perform well.
Keywords
phi correlation; tetrachoric correlation; biserial correlation; point biserial correlation; correlation coefficient V; bias; size; power
Subject
Business, Economics and Management, Econometrics and Statistics
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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