The Effectiveness of Categorical Variables in Discriminant Function Analysis

A preliminary study of the feasibility of using categorical variables in discriminant function analysis was performed. Data including both continuous and categorical variables were used and predictive results examined. The discriminant function techniques were found to be robust enough to include the use of categorical variables. Some problems were encountered with using the trace criterion for selecting the most discriminating variables when these variables are categorical. No monotonic relationship was found to exist between the trace and the number of correct predictions. This study did show that the use of categorical variables does have much potential as a statistical tool in classification procedures. (50 pages