"polychoric estimates polychoric and polyserial correlations, and polychoricpca performs the principal component analysis on the resulting correlation matrix. The current version (1.4) of the routine requires Stata 8.2. "The polychoric correlation of two ordinal variables is derived as follows. Suppose each of the ordinal variables was obtained by categorizing a normally distributed underlying variable, and those two unobserved variables follow a bivariate normal distribution. Then the (maximum likelihood) estimate of that correlation is the polychoric correlation. If each of the ordinal variables has only two categories, then the correlation between the two variables is referred to as tetrachoric." Hope this helps. --Mark Quoting Patricia Sourdin <patricia.sourdin@adelaide.edu.au>: > Hi Statalist > just a query on -factor-. > I am trying to construct an index where I have five variables which > are binary > indicators. > I have read somewhere that it is not appropriate to use factor > analysis if the > variables are binary. Can anyone confirm, please? > Also, would -pca- be an alternative in this case? > As usual, any help would be appreciated. > Patricia > * > * For searches and help try: > * http://www.stata.com/support/faqs/res/findit.html > * http://www.stata.com/support/statalist/faq > * http://www.ats.ucla.edu/stat/stata/ > Prof. Mark Schaffer Director, CERT Department of Economics School of Management & Languages Heriot-Watt University, Edinburgh EH14 4AS tel +44-131-451-3494 / fax +44-131-451-3008 email: m.e.schaffer@hw.ac.uk web: http://www.sml.hw.ac.uk/ecomes ________________________________________________________________ DISCLAIMER: This e-mail and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom it is addressed. If you are not the intended recipient you are prohibited from using any of the information contained in this e-mail. In such a case, please destroy all copies in your possession and notify the sender by reply e-mail. Heriot Watt University does not accept liability or responsibility for changes made to this e-mail after it was sent, or for viruses transmitted through this e-mail. Opinions, comments, conclusions and other information in this e-mail that do not relate to the official business of Heriot Watt University are not endorsed by it. ________________________________________________________________ * * For searches and help try: * http://www.stata.com/support/faqs/res/findit.html * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/