Soc Indic Res https://doi.org/10.1007/s11205-018-1842-2 1 3 Identifying the Components of Social Capital by Categorical Principal Component Analysis (CATPCA) Nasir Saukani 1  · Noor Azina Ismail 2 Accepted: 21 January 2018 © Springer Science+Business Media B.V., part of Springer Nature 2018 Abstract Social capital is a promising concept, widely used by social science researchers in analysing factors that contribute to the persistence of various economic issues. Unfor- tunately, the search for the best way to defne, measure and classify the appropriate com- ponents that constitute this intangible form of capital is far from complete. Generally, data on social capital are qualitative in nature (mostly of the nominal and ordinal types) and encompass a large number of variables. This challenges the researcher to fnd the best way to reduce these data to a small number of composites to be used as a proxy of measurement in further analysis. Although principal component analysis (PCA) is considered an appro- priate method and has been widely adopted in past studies, the requirement that data must be at the numeric measurement level, as well as the assumptions of linear relationships between variables, might hinder the use of PCA in working with social capital data. Cat- egorical principal component analysis (CATPCA) is a more fexible alternative, suitable for variables of mixed measurement levels (nominal, ordinal, and numeric) that may not be linearly related to each other. Based on theory and past studies, questionnaires have been constructed and feldwork has been carried out to gather data on social capital in Malaysia. Later, using CATPCA, 42 potential variables were identifed to represent components of social capital. Final results indicate that after withdrawing 9 variables with bad fts, CAT- PCA has categorized the balance of 33 variables into four dimensions of social capital. These dimensions can be described by 5 principal components, which have been identifed as infuence of spirituality and culture, benefts from interaction with friend, trusted person during fnancial difculties, benefts from fnancial aid receive and benefts from involve- ment in association. The frst component represents culture/spirituality, the new dimension * Noor Azina Ismail nazina@um.edu.my Nasir Saukani nasirs@ukm.edu.my 1 School of Economics, Faculty of Economics and Management, National University of Malaysia, 43600 Bangi, Selangor, Malaysia 2 Department of Applied Statistics, Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur, Malaysia