DISCRIMINANT ANALYSIS

Why DA?
• Researcher’s purpose is to classify objects by a set of independent variables into two

or more exclusively categories.

Example
• A manager might want to distinguish between applicants as those to hire and not to hire. • The challenge is to find the discriminating variables to be utilized in a predictive equation that will produce better than chance assignment of the individuals to the groups.

Purpose of DA
• The prediction of a categorical variable (rather than a continuous interval-scaled variable as in multiple regressions) is the purpose of multiple discriminant analysis

What to determine?
• In each of the above problems the researcher must determine which variables are associated with the probability of an object falling into a particular group..

Statistical significance
• In a statistical sense the problems of studying the direction of group differences is the problem of finding a linear combination of independent variables, the discriminant function that shows large differences as group means.

• We will consider a two group discriminant analysis problem where the dependent variable Y is measured on a nominal scale (n way discriminant analysis is possible)

• the problem is to find a linear combination of the independent variables that shows large differences in group means. The first task is to estimate the coefficients of the individuals discriminant scores.

• The following linear function is used Zi =b1X1i +b2x2i +………+ bnXni Where • Xni = applicant’s value on the nth independent variable • bn= discriminant function for the nth variable • Zi = ith applicants discriminant score

• Using scores for all individuals in the sample, a discriminate function is determined based on the criterion that the groups be maximally discriminated on the set of independent variables.

• Returning to the example with three independent variables, • suppose the personnel manager calculates the standardized weights in the equation to be • Z = b1X1 +b2X2+b3X3 = .069X1 + .013X2 +.0007X3

So what is DA?
• Discriminant analysis is a statistical tool for determining such linear combinations. Deriving the coefficients of a linear function is the task of a researcher

• This means that age (X1) is much more important than the sales aptitude test scores(X2) and mechanical ability (X3) has relatively less discriminating power.

• The standardized discriminant coefficients of weights provide information about the relative importance of each of these variables in discriminating between these groups.

• An important goal of discriminant analysis is to perform a classification function. The object of classification in our example is to predict which applicants will be successful and which will be unsuccessful and to group them accordingly

Statistics associated with DA
• Cannonical Correlation Measures the extent of association between the discriminant scores and the groups. Measure of association between single discriminant function and set of dummy variables that define group membership

• Centroid Mean values for discriminant scores for a particular group. Discriminant function coefficients(unstandardized) are multipliers of the variables when var are in original units of measurement

• Eigen value- each discriminant function has one. EV is the ratio of bet-grp to within grp sum of squares • Standardized dis fn coeff used as multipliers when the var have been standardized to a mean of 0 and variance of 1

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