Graph-Based Tests for Two-Sample Comparisons of Categorical Data
  We study the problem of two-sample comparison with categorical data when the contingency table is sparsely populated. In modern applications, the number of categories is often comparable to the sample size, causing existing methods to have low power. When the number of categories is large, there is often underlying structure on the sample space that can be exploited. We propose a general non-parametric approach that utilizes similarity information on the space of all categories in two sample tests. Our approach extends the graph-based tests of Friedman and Rafsky (1979) and Rosenbaum (2005), which are tests base on graphs connecting observations by similarity. Both tests require uniqueness of the underlying graph and cannot be directly applied on categorical data. We explored different ways to extend graph-based tests to the categorical setting and found two types of statistics that are both powerful and fast to compute. We showed that their permutation null distributions are asymptotically normal and that their $p$-value approximations under typical settings are quite accurate, facilitating the application of the new approach. The approach is illustrated through several examples. 
Hao Chen, Nancy R. Zhang
stat.ME