Maximum Likelihood Estimation of the Polychoric Correlation Coefficient

Abstract

The polychoric correlation is discussed as a generalization of the tetrachoric correlation coefficient to more than two classes. Two estimation methods are discussed: Maximum likelihood estimation, and what may be called “two-step maximum likelihood” estimation. For the latter method, the thresholds are estimated in the first step. For both methods, asymptotic covariance matrices for estimates are derived, and the methods are illustrated and compared with artificial and real data.