I have a dataset with a large number of Yes/No responses. Can I use principal components (PCA) or any other data reduction analyses (such as factor analysis) for this type of data? Please advise how I go about doing this using SPSS.
The question of dichotomous or binary variables in PCA or Factor analysis is eternal. There are polar opinions from "it is illegal" to "it is alright", through something like "you may do it but you'll get too many factors". My own current opinion is as follows. First, I deem that binary observed variable is descrete and that it is improper to treat it in any way as continuous. Can this discrete variable give rise to factor or principal component?