Types of Categorical and Quantitative Data

1. What is nominal data?

Nominal data is a categorical (qualitative) data type, so it describes qualitative characteristics

or groups, with no order or rank between categories. You can code nominal variables with
numbers if you want, but the order is arbitrary and any calculations, such as computing a mean,
median, or standard deviation, would be meaningless.

Examples of nominal data include:

• Gender, ethnicity, eye colour, blood type

• Brand of refrigerator/motor vehicle/television owned
• Political candidate/party preference, shampoo preference, favourite meal

In all of these examples, the data options are categorical, and there’s no ranking or natural
order. In other words, they all have the same value – one is not ranked above another. So, you
can view nominal data as the most basic level of measurement, reflecting categories with no
rank or order involved.

2. What is ordinal data?

Ordinal data is the same as nominal data in that it’s looking at categories, but unlike nominal
data, there is also a meaningful order or rank between the options. An ordinal scale is one where
the order matters but not the difference between values.

Examples of ordinal data include:

• Socio economic level (e.g. low income, middle income, high income)
• Income level (“less than 50K”, “50K-100K”, “over 100K”)
• Political orientation (e.g. far left, left, centre, right, far right)
• Level of agreement (e.g. strongly disagree, disagree, neutral, agree, strongly agree)

NOTE: Some sources (including the textbook) consider the Likert scale, as we discussed in
class, to be ordinal data rather than interval data (in the class notes, I said that the Likert
scale was an example of an interval variable; but many people who use the Likert scale
consider it to be an ordinal varible)

As you can see in these examples, all the options are still categories, but there is an ordering or
ranking difference between the options. You can’t numerically measure the differences between
the options (because they are categories, after all), but you can order and/or logically rank them.
So, you can view ordinal as a slightly more sophisticated level of measurement than nominal.
3. What is interval data?

An interval scale is one where there is order and the difference between two values is
meaningful. Interval variables can take on values that are less than zero (negative values).
However taking the ratio between two values is not meaningful.

Interval data are a quantitative (numerical) data type. In other words, it is a level of
measurement that involves data that is naturally quantitative (is usually measured in numbers).
Specifically, interval data has an order (like ordinal data), plus the difference between two values
is meaningful (unlike ordinal data).

Examples of interval variables include

• Credit scores (300 – 850)

• SAT/GMAT scores (200 – 800)
• IQ scores
• The temperature in Celsius or Fahrenheit

Importantly, in all of these examples of interval data, the data points are numerical, but the zero
point is arbitrary.

For example, a temperature of zero degrees Celsius (0oC) does not mean that there is no
temperature (or no heat at all) – it just means the temperature is 10oC less than a temperature of
10oC. Likewise, if the temperature is 10oC overnight, but 20oC during the day, that does NOT
mean it is twice as warm. It just means that it is 10oC warmer.

Similarly, you cannot achieve a zero credit score or a zero GMAT score.

In other words, interval data is a level of measurement that’s numerical (and you can measure
the distance between points), but that doesn’t have a meaningful zero point – the zero is
arbitrary.

Therefore, interval-type data offers a more sophisticated level of measurement than nominal
and ordinal data.
4. What is ratio data?

Ratio-type data is the most sophisticated level of measurement. Like interval data, it is
ordered/ranked and the numerical distance between points is consistent (and can be measured).
But the differences are:

• That the zero point reflects an absolute zero (unlike interval data’s arbitrary zero point). In
other words, a measurement of zero means that there is nothing of that variable.
• As a result, it also makes sense to talk about the ratio of one value to another
• And according the office hour video on types of variables that is provided on Wiley-Plus,
ratio variables can NOT be less than zero (can not be negative).

Here are some examples of ratio data:

• Weight, height, or length

• The temperature in Kelvin (since zero Kelvin means zero heat)
• Length of time/duration (e.g. seconds, minutes, hours)

NOTE: In class, I mistakenly said that annual rates of return on an investment portfolio
are ratio data, but because a portfolio can have a return of less than 0, that is not correct.
According to the textbook, rates of return on a stock or portfolio would be an interval
variable. Other examples of interval data given in the textbook: percentage change in
employment, and the dollar change in the price of a stock.

In all of these examples, you can see that the zero point is absolute. For example, zero seconds
quite literally means zero duration. Similarly, zero weight means weightless. It’s not some
arbitrary number. This is what makes ratio-type data the most sophisticated level of
measurement.

With ratio data, not only can you meaningfully measure distances between data points (i.e. add
and subtract) – you can also meaningfully multiply and divide. For example, 20 minutes is
indeed twice as much time as 10 minutes. You couldn’t do that with credit scores (i.e. interval
data), as there’s no such thing as a zero credit score.

Why does it matter?

The reason it’s important to understand the levels of measurement in your data – nominal,
ordinal, interval and ratio – is because they directly impact which statistical techniques you
can use in your analysis. Each statistical test only works with certain types of data. Some
techniques work with categorical data (i.e. nominal or ordinal data), while others work with
numerical data (i.e. interval or ratio data) – and some work with a mix. While statistical
software like SPSS or R might “let” you run the test with the wrong type of data, your results
will be flawed at best, and meaningless at worst.
The takeaway – make sure you understand the differences between the various levels of
measurement before you decide on your statistical analysis techniques. Even better, think about
what type of data you want to collect at the survey design stage (and design your survey
accordingly) so that you can run the most sophisticated statistical analyses once you’ve got your
data.

In Summary

In this post, we looked at the four levels of measurement – nominal, ordinal, interval and
ratio. Here’s a visual summary of each.

Nominal Ordinal Interval Ratio

Categories X X X X
Order/Rank X X X
Equal Spacing X X
True Absolute Zero X
Can Add and Subtract X X
Can Multiply and Divide X
Can Calculate Mode X X X X
Can Calculate Median X X X
Can Calculate Arithmetic Mean X X
Can Calculate Geometric Mean X

Remember, the level of measurement directly impacts which statistical techniques you can use
in your analysis, so make sure you always classify your data before you apply any given
technique.