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st: RE: Econometrics Theory Questions on Dummies and Correlation Analysis
Please note various points about
1. This message is just a repeat of
one sent yesterday.
2. Please don't send email junk
like vcards with your postings.
As for your question, I don't think
there is anything to prohibit you
doing this. The results won't necessarily
be very helpful or meaningful, except
in the extreme cases in which variables
are identical, or nearly so, which will
produce correlations that are +1, or nearly
Dr. Stephen Owusu-Ansah
> I have econometric/statistical theory questions about dummy
> variables and correlation analysis:
> 1. Is there any theory that prohibit one from undertaking a
> correlation analysis (i.e., correlation matrix) with either
> with Pearson or Spearman rank correlation test on variables,
> which are all dummies?
> 2. If there is no prohibition, theory wise, can the bivariate
> correlation coeficients for the dummy variables be interpreted
> in the same way as one would do with continuous variables?
> Thanks for your usual cooperation.
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