Categorical variables are qualitative data in which the values are assigned to a set of distinct groups or categories. These groups may consist of alphabetic (e.g., male, female) or numeric labels (e.g., male = 0, female = 1) that do not contain mathematical information beyond the frequency counts related to group membership. Instead, categorical variables often provide valuable social-oriented information that is not quantitative by nature (e.g., hair color, religion, ethnic group).

In the hierarchy of measurement levels, categorical variables are associated with the two lowest variable classification orders, nominal or ordinal scales, depending on whether the variable groups exhibit an intrinsic ranking. A nominal measurement level consists purely of categorical variables that have no ordered structure for intergroup comparison. If the categories can be ranked ...