Methodology Review: Clustering Methods

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Abstract
A review of clustering methodology is presented, with emphasis on algorithm performance and the re sulting implications for applied research. After an over view of the clustering literature, the clustering process is discussed within a seven-step framework. The four major types of clustering methods can be characterized as hierarchical, partitioning, overlapping, and ordina tion algorithms. The validation of such algorithms re fers to the problem of determining the ability of the methods to recover cluster configurations which are known to exist in the data. Validation approaches in clude mathematical derivations, analyses of empirical datasets, and monte carlo simulation methods. Next, interpretation and inference procedures in cluster anal ysis are discussed. inference procedures involve test ing for significant cluster structure and the problem of determining the number of clusters in the data. The paper concludes with two sets of recommendations. One set deals with topics in clustering that would ben efit from continued research into the methodology. The other set offers recommendations for applied anal yses within the framework of the clustering process.

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