Scalable Qualitative Coding with LLMs: Chain-of-Thought Reasoning Matches Human Performance in Some Hermeneutic Tasks

Qualitative coding, or content analysis, extracts meaning from text to discern quantitative patterns across a corpus of texts. Recently, advances in the interpretive abilities of large language models (LLMs) offer potential for automating the coding process (applying category labels to texts), thereby enabling human researchers to concentrate on more creative research aspects, while delegating these interpretive tasks to AI. Our case study comprises a set of socio-historical codes on dense, paragraph-long passages representative of a humanistic study. We show that GPT-4 is capable of human-equivalent interpretations, whereas GPT-3.5 is not. Compared to our human-derived gold standard, GPT-4 delivers excellent intercoder reliability (Cohen's $\kappa \geq 0.79$) for 3 of 9 codes, and substantial reliability ($\kappa \geq 0.6$) for 8 of 9 codes. In contrast, GPT-3.5 greatly underperforms for all codes ($mean(\kappa) = 0.34$; $max(\kappa) = 0.55$). Importantly, we find that coding fidelity improves considerably when the LLM is prompted to give rationale justifying its coding decisions (chain-of-thought reasoning). We present these and other findings along with a set of best practices for adapting traditional codebooks for LLMs. Our results indicate that for certain codebooks, state-of-the-art LLMs are already adept at large-scale content analysis. Furthermore, they suggest the next generation of models will likely render AI coding a viable option for a majority of codebooks.