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Elbow method

As explained in Statistics Slam Dunk

The within-cluster sum of squares method selects a clustering count by examining how within-cluster squared distances decrease as the number of clusters increases.

The elbow method helps choose K for K-means clustering. Plot the number of clusters against within-cluster sum of squares; the curve usually drops quickly, then shows diminishing returns. The bend, or elbow, suggests a practical cluster count. section 11.5.2

Use the method as a guided decision rather than an automatic answer:

  • Compute within-cluster squared distances for increasing values of K. section 11.5.2
  • Plot K on the x-axis and within-cluster sum of squares on the y-axis. section 11.5.2
  • Look for the point where additional clusters produce noticeably smaller improvements. section 11.5.2
  • Compare the result with another criterion because the elbow may be unclear or subjective. section 11.5.2

NBA payrolls and wins

For adjusted team payrolls and regular-season wins from 2000 through 2017, the elbow method suggested six clusters, while the silhouette method suggested two. The analysis chose four clusters as a compromise. The resulting K-means model isolated the New York Knicks and grouped the San Antonio Spurs with ten other teams. section 20.1

How Statistics Slam Dunk covers it

How deep it goes
Explains scree plots and diminishing returns, but stops short of an objective rule when the elbow is ambiguous.
Examples
Uses NBA payrolls and regular-season wins to compare six elbow clusters, two silhouette clusters, and a chosen four-cluster solution.
What it assumes
Assumes K-means clustering and continuous variables, while requiring the analyst to specify the number of clusters.
What you can do after
Evaluate candidate K values and justify a K-means cluster count using a scree plot and a comparison criterion.
How it connects
Connects K-means clustering with scree plots, silhouette analysis, hierarchical clustering, and cluster standardization.

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This explainer was generated by Manning's knowledge graph from the text of Statistics Slam Dunk. The section links point to the parts of the book it draws on.