Posts Tagged ‘nominal’

The “Market Research Methods 101” series is back! Today I’ll introduce the last but not least of “The Three Musketeers” in the market research world: Level of Measurement. If you have read my posts for the first two “musketeers”, you should know that I love the weight scale example (hope you also like it). It helped me explain the concepts of validity and reliability and will help you and me understand what level of measure ment in just a minute. But before that, let’s review what validity and reliability are.

Validity: the weight scale is accurately showing the weight, not showing it in a wrong way, not showing anything else

Reliability: you stood on the scale 3 times, and you got the same number of your weight 3 times.

So how can we understand level of measurement by the same example? In real life, some girls can be really strict with their weight. They feel horrible by gaining mere 1 pounds. Therefore, they would like to measure their weight as accurately as possible. They don’t want the scale simply show it’s about “100 pounds”. They want to clearly know whether it’s exactly “100” pounds or it’s actually “102” pounds. Here comes level of measurement, which shows how accurately we are measuring a concept. In market research, there are 4 levels of measurement: Nominal, Ordinal, Interval, and Ratio. Let me take the measurement of income as an example to further explain the 4 levels. I’ll first give your the measurements, so you can try to find the differences by yourself before I introduce them in detail.

Nominal: Is your family’s annual income over 50,000?   A. Yes    B. No

Ordinal: How do you describe your family’s annual income status?  A. Low-income  B. Middle-income  C. High-income

Interval: Ratings on a continuous 1-10 scale (1=very low and 10=very high), where do you think your family’s annual income fall in?

Ratio: Approximately, what is your family’s annual income? _________

Here I borrowed Dr. Philip Hodgson‘s approach to explain the 4 levels of measurement. Each level of measurement is characterized by its properties. Nominal measurement has just one property:CLASSIFICATION. Ordinal measurement has two properties: CLASSIFICATION and ORDER. Interval measurement has three properties: CLASSIFICATION, ORDER and EQUAL INTERVALS. Ratio data has four properties: CLASSIFICATION, ORDER, EQUAL INTERVALS and TRUE ZERO. Because the higher levels of measurement contain more properties and more information, they permit a wider variety of interpretations. For this reason, as a market researcher, we should always keep the following rule in mind: Always assign the highest permissible level of measurement to a given set of observations.