M.

Com_Applied_Economics_IIYear_IVSem_IIIUnit
Dr. Tarannum Siddiqui

Measurement and scaling techniques

A) Measurement: Measurement is the process of observing and recording the observations that are
collected as part of research. The recording of the observations may be in terms of numbers or other
symbols to characteristics of objects according to certain prescribed rules. The respondent’s,
characteristics are feelings, attitudes, opinions etc. The most important aspect of measurement is the
specification of rules for assigning numbers to characteristics. The rules for assigning numbers
should be standardized and applied uniformly. This must not change over time or objects.
B) Scaling: Scaling is the assignment of objects to numbers or semantics according to a rule. In
scaling, the objects are text statements, usually statements of attitude, opinion, or feeling.
Issues in attitude measurement-
When a researcher is interested in measuring the attitudes, feelings or opinions of respondents
he/she should be clear about the following:
a) What is to be measured?
b) Who is to be measured?
c) The choices available in data collection techniques
Level of Measurement Scales-
The level of measurement refers to the relationship among the values that are assigned to the
attributes, feelings or opinions for a variable. Typically, there are four levels of measurement scales
or methods of assigning numbers:
a) Nominal scale,
(b) Ordinal scale,
(c) Interval scale, and
(d) Ratio scale.
(a) Nominal Scale is the crudest among all measurement scales but it is also the simplest scale. In
this scale the different scores on a measurement simply indicate different categories. The nominal
scale does not express any values or relationships between variables.
The nominal scale is often referred to as a categorical scale. The assigned numbers have no
arithmetic properties and act only as labels. The only statistical operation that can be performed on
nominal scales is a frequency count. We cannot determine an average except mode.
For example: labeling men as ‘1’ and women as ‘2’ which is the most common way of labeling
gender for data recording purpose does not mean women are ‘twice something or other’ than men.
Nor it suggests that men are somehow ‘better’ than women.
(b) Ordinal Scale involves the ranking of items along the continuum of the characteristic being
scaled. In this scale, the items are classified according to whether they have more or less of a
characteristic.
The main characteristic of the ordinal scale is that the categories have a logical or ordered
relationship. This type of scale permits the measurement of degrees of difference, (i.e. ‘more’ or
‘less’) but not the specific amount of differences (i.e. how much ‘more’ or ‘less’). This scale is very
common in marketing, satisfaction and attitudinal research. Using ordinal scale data, we can
perform statistical analysis like Median and Mode, but not the Mean.
For example, a fast food home delivery shop may wish to ask its customers: How would you rate
the service of our staff? (1) Excellent • (2) Very Good • (3) Good • (4) Poor • (5) Worst •
(c) Interval Scale is a scale in which the numbers are used to rank attributes such that numerically
equal distances on the scale represent equal distance in the characteristic being measured. An
interval scale contains all the information of an ordinal scale, but it also one allows to compare the
difference/distance between attributes. Interval scales may be either in numeric or semantic formats.
The interval scales allow the calculation of averages like Mean, Median and Mode and dispersion
like Range and Standard Deviation.
For example, the difference between ‘1’ and ‘2’ is equal to the difference between ‘3’ and ‘4’.
Further, the difference between ‘2’ and ‘4’ is twice the difference between ‘1’ and ‘2’. Measuring
temperature is an example of interval scale. But, we cannot say 40°C is twice as hot as 20°C.
(i) Example of interval scale in numeric format
Food supplied is:
Fresh 1 2 3 4 5
Tastes good 1 2 3 4 5 Indicate your score on the
Value for money 1 2 3 4 5 concerned black and
Attractive packaging 1 2 3 4 5 circle the appropriate
Prompt time delivery 1 2 3 4 5 number on each line.
(ii) Example of Interval Scale in Sematic Format
Please indicate your views on the food supplied by XXX fast shop by scoring them on a five points
scale from 1 to 5 (that is, 1 = excellent, 2 = very good, 3 = good, 4 = poor, 5 = worst). Indicate your
views by ticking the appropriate responses below:
Food Supplied is: Excellent Very good Good Poor Worst
Fresh
Tastes good
Value for money
Attractive packaging
Prompt time delivery

(d) Ratio Scale is the highest level of measurement scales. This has the properties of an interval
scale together with a fixed (absolute) zero point. The absolute zero point allows us to construct a
meaningful ratio.
Ratio scales permit the researcher to compare both differences in scores and relative magnitude of
scores. Examples of ratio scales include weights, lengths and times.
For example, the number of customers of a bank’s ATM in the last three months is a ratio scale.
This is because you can compare this with previous three months.
For example, the difference between 10 and 15 minutes is the same as the difference between 25
and 30 minutes and 30 minutes is twice as long as 15 minutes

Types of Scaling Technique-

(1) Comparative Scales
(i) Paired Comparison,
(ii) Rank Order,
(iii) Constant Sum,
(iv) Q-Sort and Other Procedures
(2) Non-comparative Scales
(i) Continuous Rating Scales,
(ii) Itemized Rating Scales- (A) Likert, (B) Semantic differential, (C) Stapel
(1) Comparative Scales-
In comparative scaling, the respondent is asked to compare one object with another. The
comparative scales can further be divided into the following four types of scaling techniques: (i)
Paired Comparison Scale, (ii) Rank Order Scale, (iii) Constant Sum Scale, and (iv) Q-sort Scale.
(i) Paired Comparison Scale: This is a comparative scaling technique in which a respondent is
presented with two objects at a time and asked to select one object according to some criterion. The
data obtained are ordinal in nature.
For example, there are four types of cold drinks Coke, Pepsi, Sprite, and Limca. The respondents
can prefer Pepsi to Coke or Coke to Sprite, etc.
Brand Coke Pepsi Sprite Limca
Coke - 1
Pepsi -
Sprite 1 1 -
Limca 1 1 1 -
No. of times preferred 2 3 1 0

(ii) Rank Order Scale: This is another type of comparative scaling technique in which respondents
are presented with several items simultaneously and asked to rank them in the order of priority. This
is an ordinal scale that describes the favoured and unfavoured objects, but does not reveal the
distance between the objects. The resultant data in rank order is ordinal data. This yields better
results when direct comparison are required between the given objects. The major disadvantage of
this technique is that only ordinal data can be generated.
Brand Rank
Coke 3
Pepsi 1
Limca 2
Sprite 4

(iii) Constant Sum Scale: In this scale, the respondents are asked to allocate a constant sum of
units such as points, rupees, or chips among a set of stimulus objects with respect to some criterion.
For example, you may wish to determine how important the attributes of price, fragrance,
packaging, cleaning power, and lather of a detergent are to consumers. Respondents might be asked
to divide a constant sum to indicate the relative importance of the attributes. The advantage of this
technique is saving time. However, main disadvantages are the respondents may allocate more or
fewer points than those specified. The second problem is respondents might be confused.
Attribute No. of Points
Price 50
Fragrance 05
Packaging 10
Cleaning Power 30
Lather 05
Total Points 100

(iv) Q-Sort Scale: This is a comparative scale that uses a rank order procedure to sort objects based
on similarity with respect to some criterion. The important characteristic of this methodology is that
it is more important to make comparisons among different responses of a respondent than the
responses between different respondents. Therefore, it is a comparative method of scaling rather
than an absolute rating scale. In this method the respondent is given statements in a large number
for describing the characteristics of a product or a large number of brands of a product. Such as-
Prefer Most, Like, Neutral, Dislike, Prefer Least.

(2) In non-comparative scaling-

In non-comparative scaling respondents need only evaluate a single object. Their evaluation is
independent of the other object, which the researcher is studying. The non-comparative scaling
techniques can be further divided into:
(i) Continuous Rating Scale, and
(ii) Itemized Rating Scale.
(i) Continuous Rating Scales: It is very simple and highly useful. In continuous rating scale, the
respondent’s rate the objects by placing a mark at the appropriate position on a continuous line that
runs from one extreme of the criterion variable to the other. Example: Question: How would you
rate the TV advertisement as a guide for buying?

Strong Strong
Agree 10 9 8 7 6 5 4 3 2 1 0 Disagree
(ii) Itemized Rating Scales: Itemized rating scale is a scale having numbers or brief descriptions
associated with each category. The categories are ordered in terms of scale position and the
respondents are required to select one of the limited number of categories that best describes the
product, brand, company, or product attribute being rated. Itemized rating scales are widely used in
marketing research. Itemised rating scales is further divided into three parts, namely-
(a) Likert scale,
(b) Semantic Differential Scale, and
(c) Stapel Scale.
The itemised rating scales can be in the form of : (a) graphic, (b) verbal, or (c) numeric as
shown below :
Itemised Graphic Scale Itemised Verbal Scale Itemised Nemeric Scale

Favourable

-5
Completely Satisfied
-4

-3
Somewhat Satisfied
Indifferent -2

-1

Neither Satisfied Nor dissatisfied 0

+1

+2
Somewhat dissatisfied
Unfavourable +3

+4

Completely dissatisfied +5
(a) Likert Scale: Likert, is extremely popular for measuring attitudes, because, the method is
simple to administer. With the Likert scale, the respondents indicate their own attitudes by checking
how strongly they agree or disagree with carefully worded statements that range from very positive
to very negative towards the attitudinal object. Respondents generally choose from five alternatives
(say strongly agree, agree, neither agree nor disagree, disagree, strongly disagree). A Likert scale
may include a number of items or statements. Disadvantage of Likert Scale is that it takes longer
time to complete than other itemised rating scales because respondents have to read each statement.
Despite the above disadvantages, this scale has several advantages. It is easy to construct,
administer and use.
A Likert Scale for studying opinions on food products
Neither
Strongly Strongly
Particular Agree Agree nor Disagree
Agree disagree
disagree
If the price of raw materials fall,
firms too should reduce the 1 2 3 4 5
price of the food products
There should be uniform price
through out the country for 1 2 3 4 5
food products
The food companies should
concentrate more on keeping
1 2 3 4 5
hygiene while manufacturing
food products.
The expiry dates should be
printed on the food products
1 2 3 4 5
before the are delivered to
consumers in the market.
There should be government
regulations on the firms in
1 2 3 4 5
keeping acceptable quality and
on the prices.
Now-a-days most food
companies are concerned
1 2 3 4 5
only with profit making rather
than taking care of quality.

(b) Semantic Differential Scale: This is a seven point rating scale with end points associated with
bipolar labels (such as good and bad, complex and simple) that have semantic meaning. It can be
used to find whether a respondent has a positive or negative attitude towards an object. It has been
widely used in comparing brands, products and company images. It has also been used to develop
advertising and promotion strategies and in a new product development study.
 Examples of Semantic Differential Scale
Modern - - - Old- fashioned
Good - - - Bad
Clean - - - Dirty
Important - - - Unimportant
Expensive - - - Inexpensive
Useful - - - Useless
Strong - - - Weak
Quick - - - Slow

(c) Staple Scale: The Stapel scale was originally developed to measure the direction and intensity
of an attitude simultaneously. Modern versions of the Stapel scale place a single adjective as a
substitute for the Semantic differential when it is difficult to create pairs of bipolar adjectives. The
modified Stapel scale places a single adjective in the centre of an even number of numerical Values.
Selection of an appropriate scaling technique-
A number of issues decide the choice of scaling technique. Some significant issues are: 1) Problem
Definition and Statistical Analysis,
2) The Choice between Comparative and Non-comparative Scales,
3) Type of Category Labels,
4) Number of Categories,
5) Balanced versus Unbalanced Scale, and
6) Forced versus Non-forced Categories

What is a Hypothesis? - Definition & Explanation

Ordinarily, when one talks about hypothesis, one simply means a mere assumption or some
supposition to be proved or disproved. But for a researcher hypothesis is a formal question that he
intends to resolve. Thus a hypothesis may be defined as a proposition or a set of proposition set
forth as an explanation for the occurrence of some specified group of phenomena either asserted
merely as a provisional conjecture to guide some investigation or accepted as highly probable in
the light of established facts. Quite often a research hypothesis is a predictive statement, capable
of being tested by scientific methods, that relates an independent variable to some dependent
variable. For example, consider statements like the following ones:
“Students who receive counselling will show a greater increase in creativity than students not
receiving counselling” Or “the automobile A is performing as well as automobile B.”
These are hypotheses capable of being objectively verified and tested. Thus, we may conclude that
a hypothesis states what we are looking for and it is a proposition, which can be put to a test to
determine its validity.
Characteristics of hypothesis: Hypothesis must possess the following characteristics:
1. Hypothesis should be clear and precise. If the hypothesis is not clear and precise, the
inferences drawn on its basis cannot be taken as reliable.
2. Hypothesis should be capable of being tested. In a swamp of untestable hypotheses,
many a time the research programmes have bogged down. Some prior study may be done by
researcher in order to make hypothesis a testable one. A hypothesis “is testable if other deductions
can be made from it which, in turn, can be confirmed or disproved by observation.”
3. Hypothesis should state relationship between variables, if it happens to be a
relational hypothesis.
4. Hypothesis should be limited in scope and must be specific. A researcher must
remember that narrower hypotheses are generally more testable and he should develop such
hypotheses.
5. Hypothesis should be stated as far as possible in most simple terms so that the same
is easily understandable by all concerned. But one must remember that simplicity of hypothesis
has nothing to do with its significance.
6. Hypothesis should be consistent with most known facts i.e., it must be consistent
with a substantial body of established facts. In other words, it should be one which judges accept
as being the most likely.
7. Hypothesis should be amenable to testing within a reasonable time. One should not
use even an excellent hypothesis, if the same cannot be tested in reasonable time for one cannot
spend a life-time collecting data to test it.
8. Hypothesis must explain the facts that gave rise to the need for explanation. This
means that by using the hypothesis plus other known and accepted generalizations, one should be
able to deduce the original problem condition. Thus hypothesis must actually explain what it
claims to explain; it should have empirical reference.

TESTING OF HYPOTHESIS IN RESEARCH METHODOLOGY -

As has been stated above that hypothesis testing determines the validity of the assumption
(technically described as null hypothesis) with a view to choose between two conflicting
hypotheses about the value of a population parameter. Hypothesis testing helps to decide on the
basis of a sample data, whether a hypothesis about the population is likely to be true or false.
Statisticians have developed several tests of hypotheses (also known as the tests of significance)
for the purpose of testing of hypotheses which can be classified as:
a. Parametric tests or standard tests of hypotheses; and
b. Non-parametric tests or distribution-free test of hypothesis.
Parametric tests usually assume certain properties of the parent population from which we
draw samples. Assumptions like observations come from a normal population, sample size is
large, assumptions about the population parameters like mean, variance, etc., must hold good
before parametric tests can be used. But there are situations when the researcher cannot or does
not want to make such assumptions. In such situations we use statistical methods for testing
hypotheses, which are called non-parametric tests because such tests do not depend on any
assumption about the parameters of the parent population. Besides, most non-parametric tests
assume only nominal or ordinal data, whereas parametric tests require measurement equivalent to
at least an interval scale. As a result, non-parametric tests need more observations than parametric
tests to achieve the same size of Type I and Type II errors.
PROCEDURE FOR HYPOTHESIS TESTING IN RESEARCH METHODOLOGY
Procedure for hypothesis testing means to tell (on the basis of the data the researcher has
collected) whether or not the hypothesis seems to be valid. In hypothesis testing the main question
is: whether to accept the null hypothesis or not to accept the null hypothesis? Procedure for
hypothesis testing refers to all those steps that we undertake for making a choice between the two
actions i.e., rejection and acceptance of a null hypothesis. The various steps involved in hypothesis
testing are stated below:
1. Making a formal statement: The step consists in making a formal statement of the
null hypothesis (H0) and also of the alternative hypothesis (Ha). This means that hypotheses should
be clearly stated, considering the nature of the research problem. For instance, Mr. Mohan of the
Civil Engineering Department wants to test the load bearing capacity of an old bridge which must
be more than 10 tons, in that case he can state his hypotheses.
Take another example. The average score in an aptitude test administered at the national level is
80. To evaluate a state’s education system, the average score of 100 of the state’s students selected
on random basis was 75. The state wants to know if there is a significant difference between the
local scores and the national scores.
The formulation of hypotheses is an important step which must be accomplished with due care in
accordance with the object and nature of the problem under consideration. It also indicates
whether we should use a one-tailed test or a two-tailed test. If Ha is of the type greater than (or of
the type lesser than), we use a one-tailed test, but when Ha is of the type “whether greater or
smaller” then we use a two-tailed test.
2. Selecting a significance level: The hypotheses are tested on a pre-determined level
of significance and as such the same should be specified. Generally, in practice, either 5% level or
1% level is adopted for the purpose. The factors that affect the level of significance are: the
magnitude of the difference between sample means, the size of the samples, the variability of
measurements within samples; and whether the hypothesis is directional or non-directional (A
directional hypothesis is one which predicts the direction of the difference between, say, means).
In brief, the level of significance must be adequate in the context of the purpose and nature of
enquiry.
3. Deciding the distribution to use: After deciding the level of significance, the next
step in hypothesis testing is to determine the appropriate sampling distribution. The choice
generally remains between normal distribution and the t-distribution. The rules for selecting the
correct distribution are similar to those which we have stated earlier in the context of estimation.
4. Selecting a random sample and computing an appropriate value: Another step is
to select a random sample(s) and compute an appropriate value from the sample data concerning
the test statistic utilizing the relevant distribution. In other words, draw a sample to furnish
empirical data.
5. Calculation of the probability: One has then to calculate the probability that the
sample result would diverge as widely as it has from expectations, if the null hypothesis were in
fact true.
6. Comparing the probability: Yet another step consists in comparing the probability
thus calculated with the specified value for a , the significance level. If the calculated probability
is equal to or smaller than the a value in case of one-tailed test (and a /2 in case of two-tailed test),
then reject the null hypothesis (i.e., accept the alternative hypothesis), but if the calculated
probability is greater, then accept the null hypothesis. In case we reject H0, we run a risk of (at
most the level of significance) committing an error of Type I, but if we accept H0, then we run
some risk (the size of which cannot be specified as long as the H0 happens to be vague rather than
specific) of committing an error of Type II.