Unit 1

Overview of
Multivariate Methods
a. Multivariate in S t a t i s t i c a l Te r m s

Bivariate partial correlation

Simple (two-variable) correlation between two

sets of residuals (unexplained variances) that
remain after the association of other
independent variables is removed.
 Bootstrapping
An approach to validating a multivariate model by
drawing a large number of subsamples and estimating
models for each subsample. Estimates from all the
subsamples are then combined, providing not only the
“best” estimated coefficients (e.g., means of each
estimated coefficient across all the subsample
models), but their expected variability and thus their
likelihood of differing from zero;
 Bootstrapping
that is, are the estimated coefficients statistically
different from zero or not? This approach
does not rely on statistical assumptions about the
population to assess statistical significance, but
instead makes its assessment based solely on the
sample data
Dependence technique

Classification of statistical techniques distinguished

by having a variable or set of variables identified as
the dependent variable(s) and the remaining variables
as independent. The objective is prediction of the
dependent variable(s) by the independent variable(s).
An example is regression analysis.
Dependent variable

Presumed effect of, or response to, a change in the

independent variable(s).
 Dummy variable

Nonmetrically measured variable transformed into a

metric variable by assigning a 1 or a 0 to a subject,
depending on whether it possesses a particular
characteristic.
 E ff e c t s i z e

Estimate of the degree to which the phenomenon

being studied (e.g., correlation or difference in
means) exists in the population.

Independent variable
Presumed cause of any change in the dependent
variable.
 Indicator

Single variable used in conjunction with one or more

other variables to form a composite measure

Interdependence technique
Classification of statistical techniques in which the
variables are not divided into dependent and
i n d e p e n d e n t s e t s ; r a t h e r, a l l v a r i a b l e s a r e a n a l y z e d
as a single set (e.g., factor analysis).
Measurement error

Inaccuracies of measuring the “true” variable values

due to the fallibility of the measurement instrument
(i.e., inappropriate response scales), data entry
errors, or respondent errors.
 Metric data

Also called quantitative data, interval data, or ratio

data, these measurements identify or describe
subjects (or objects) not only on the possession of an
attribute but also by the amount or degree to which
the subject may be characterized by the attribute. For
example, a person’s age and weight are metric data.
 Multicollinearity

Extent to which a variable can be explained by the

other variables in the analysis. As multicollinearity
increases, it complicates the interpretation of the
variate because it is more difficult to ascertain the
effect of any single variable, owing to their
interrelationships.
Multivariate analysis

Analysis of multiple variables in a single relationship

or set of relationships.
Multivariate measurement

Use of two or more variables as indicators of a single

composite measure. For example, a personality test
may provide the answers to a series of individual
questions (indicators), which are then combined to
form a single score (summated scale) representing
the personality trait.
 Nonmetric data

Also called qualitative data, these are attributes,

characteristics, or categorical properties that identify
or describe a subject or object. They differ from
metric data by indicating the presence of an attribute,
but not the amount. Examples are occupation
( p h y s i c i a n , a t t o r n e y, p r o f e s s o r ) o r b u y e r s t a t u s
( b u y e r, n o n b u y e r ) . A l s o c a l l e d n o m i n a l d a t a o r o r d i n a l
data
 Po w e r

a hypothesized relationship when it exists.

Determined as a function of (1) the statistical
s i g n i f i c a n c e l e v e l s e t b y t h e r e s e a r c h e r f o r a Ty p e I
error ( ), (2) the sample size used in the analysis, and
(3) the effect size being examined.
 P r a c t i c a l s i g n i fi c a n c e

Means of assessing multivariate analysis results

based on their substantive findings rather than their
statistical significance. Whereas statistical
significance determines whether the result is
attributable to chance, practical significance assesses
whether the result is useful (i.e., substantial enough
to warrant action) in achieving the research
objectives.
 Re l i a b i l i t y

Extent to which a variable or set of variables is

consistent in what it is intended to measure. If
multiple measurements are taken, the reliable
measures will all be consistent in their values. It
differs from validity in that it relates not to what
should be measured, but instead to how
it is measured.
 S p e c i fi c a t i o n e r r o r

Omitting a key variable from the analysis, thus

affecting the estimated effects of included variables.
 Summated scales

Method of combining several variables that measure

the same concept into a single variable in an attempt
to increase the reliability of the measurement through
multivariate measurement. In most instances, the
separate variables are summed and then their total or
average score is used in the analysis.
 Tr e a t m e n t

Independent variable the researcher manipulates to

see the effect (if any) on the dependent variable(s),
such as in an experiment (e.g., testing the appeal of
color versus black-andwhite advertisements).
 Ty p e I e r r o r

Probability of incorrectly rejecting the null hypothesis

—in most cases, it means saying a difference or
correlation exists when it actually does not. Also
t e r m e d a l p h a ( ) . Ty p i c a l l e v e l s a r e 5 o r 1 p e r c e n t ,
t e r m e d t h e . 0 5 o r . 0 1 l e v e l , r e s p e c t i v e l y.
 Ty p e I I e r r o r

Probability of incorrectly failing to reject the null

hypothesis—in simple terms, the chance of not finding
a correlation or mean difference when it does exist.
A l s o t e r m e d b e t a ( β ) , i t i s i n v e r s e l y r e l a t e d t o Ty p e I
e r r o r. T h e v a l u e o f 1 m i n u s t h e Ty p e I I e r r o r ( 1 - β ) i s
defined as power
U n i v a r i a t e a n a l y s i s o f v a r i a n c e ( A N O VA )

Statistical technique used to determine, on the basis

of one dependent measure, whether samples are from
populations with equal means.
 Va l i d i t y

Extent to which a measure or set of measures

correctly represents the concept of study the degree
to which it is free from any systematic or nonrandom
e r r o r. Va l i d i t y i s c o n c e r n e d w i t h h o w w e l l t h e c o n c e p t
is defined by the measure(s), whereas reliability
relates to the consistency
of the measure(s).
 Va r i a t e

Linear combination of variables formed in the

multivariate technique by deriving empirical weights
applied to a set of variables specified by the
r e s e a r c h e r.
 Multivariate analysis

refers to all statistical techniques that simultaneously

analyze multiple measurements on individuals or
objects under investigation. Thus, any simultaneous
analysis of more than two variables can be loosely
considered multivariate
analysis.
T h e Va r i a t e
 Measurement Scales

NONMETRIC MEASUREMENT SCALES

Nonmetric data describe differences in type or kind by

indicating the presence or absence of a characteristic
o r p r o p e r t y. T h e s e p r o p e r t i e s a r e d i s c r e t e i n
that by having a particular feature, all other features
are excluded:
 Measurement Scales

NONMETRIC MEASUREMENT SCALES

for example, if a person is male, he cannot be female.

An “amount” of gender is not possible, just the state
of being male or female.
Nonmetric measurements can be made with either a
nominal or an ordinal scale.
 Measurement Scales

Nominal Scales.

A nominal scale assigns numbers as a way to label or

identify subjects or objects. The numbers assigned to
the objects have no quantitative meaning beyond
indicating the presence or absence of the attribute or
characteristic under investigation.
 Measurement Scales

Ordinal Scales.

Ordinal scales are the next “higher” level of

measurement precision. In the case of ordinal scales,
variables can be ordered or ranked in relation to the
amount of the attribute
possessed.
 Measurement Scales
For example, different levels of an individual consumer ’s
satisfaction with several new products can be
illustrated, first using an ordinal scale. The following
scale shows a respondent’s view of
three products.
 Measurement Scales
METRIC MEASUREMENT SCALES

Metric data are used when subjects differ in amount

or degree on a particular attribute. Metrically
measured variables reflect relative quantity or degree
and are appropriate for attributes involving amount or
magnitude, such as the level of satisfaction or
commitment to a job. The two different metric
measurement scales are interval and ratio scales.
 Measurement Scales
Interval Scales.

Interval scales and ratio scales (both metric) provide

the highest level of measurement precision, permitting
nearly any mathematical operation to be performed.
These two scales have constant units of
measurement, so differences between any two
adjacent points on any part of the scale are equal.
 Measurement Scales
Ratio Scales

Ratio scales represent the highest form of

measurement precision because they
possess the advantages of all lower scales plus an
absolute zero point.
T H E I M PA C T O F C H O I C E O F M E A S U R E M E N T S C A L E

Understanding the different types of measurement

scales is important for two reasons:
T H E I M PA C T O F C H O I C E O F M E A S U R E M E N T S C A L E
1. The researcher must identify the measurement
scale of each variable used, so that nonmetric
data are not incorrectly used as metric data, and vice
versa (as in our earlier example of representing
gender as 1 for male and 2 for female). If the
researcher incorrectly defines this measure as metric,
then it may be used inappropriately (e.g., finding the
mean value of gender).
T H E I M PA C T O F C H O I C E O F M E A S U R E M E N T S C A L E

2. The measurement scale is also critical in

determining which multivariate techniques are the
most applicable to the data, with considerations made
for both independent and dependent variables. In the
discussion of the techniques and their classification
i n l a t e r s e c t i o n s o f t h i s c h a p t e r, t h e m e t r i c o r
nonmetric properties of independent and dependent
variables are the determining factors in selecting the
appropriate technique.