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How will you find the correlation between a binary variable and a continuous variable ? |
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Answer» One approach would be to CALCULATE “Point Bi-serial Correlation” which will give you an estimate to measure the degree of association between a binary variable and continuous variable. The Point-Biserial Correlation Coefficient is a correlation measure of the strength of association/coherence between a continuous-level variable (ratio or interval data) and a binary variable. Binary variables are variables of nominal scale with only two VALUES. They are also called dichotomous variables or DUMMY variables in Regression Analysis. Mathematically, the Point-Biserial Correlation Coefficient is calculated just as the Pearson’s Bivariate Correlation Coefficient would be calculated, wherein the dichotomous variable of the two variables is either 0 or 1—which is why it is also called the binary variable. Since we use the same mathematical concept, we do need to FULFIL the same assumptions, which are normal distribution of the continuous variable and homoscedasticity. |
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