In SPSS all of the few dozen Proximity (similarity measures) can be
applied to variables.  (After the data are transformed and transposed)
The  Proximity matrix can then be read into the variety of cluster
procedures.  Or the transposed data can be read directly into the
CLUSTER, or Quick cluster procedure.  I see no reason (given that you
want to cluster variables) that the TWOSTEP cluster could not read a
transposed data matrix.

Of course there are all of the varieties of factor analysis which are
more commonly used to group variables.  The CATPCA procedure factors
categorical variables.

When the variables are used to classify or differentiate a categorical
variable, there are procedures like DISCRIMINANT  or the various
Procedures under CATEGORIES  or the new classification trees.

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Wolfgang M. Hartmann wrote:

> Subject: Clustering Variables
> Hi,
> a few days ago Prof. Shannon asked for references and hints
> on feature selection methods. I'm also very much interested in
> methods for variable clustering. I know about other predictive methods
> like
> LARS and Lasso or SVM or the stepwise regression methods in Alan Millers
> book. But, except PROC VARCLUS in SAS/STAT, which refers to Harman
> and Anderberg, I do not know of any other variable cluster method.
> Wolfgang