Question

What are the properties of ratio level data and what can we do with it that we cannot do with other levels of measurement?

Answer 1

All arithmetic operations are possible on a ratio variable. An example of a ratio variable would be weight (e.g., in pounds). We can accurately say that 20 pounds is twice as heavy as 10 pounds. Additionally, ratio variables have a meaningful zero-point (e.g., exactly 0 pounds means the object has no weight). Other examples of ratio variables include gross sales of a company, the expenditure of a company, the income of a company, etc.

A ratio variable can be used as a dependent variable for most parametric statistical tests such as t-tests, F-tests, correlation, and regression.

Ratio scale has most of the characteristics of the other three variable measurement scale i.e nominal, ordinal and interval. Nominal variables are used to “name,” or label a series of values. Ordinal scales provide a sufficiently good amount of information about the order of choices, such as one would be able to understand from using a customer satisfaction survey. Interval scales give us the order of values and also about the ability to quantify the difference between each one. Ratio scale helps to understand the ultimate-order, interval, values, and the true zero characteristic is an essential factor in calculating ratios.  

A ratio scale is the most informative scale as it tends to tell about the order and number of the object between the values of the scale. The most common examples of ratio scale are height, money, age, weight etc. With respect to market research, the common examples that are observed are sales, price, number of customers, market share etc.

Properties of Ratio level data:

1.Ratio scale, as mentioned earlier has an absolute zero characteristic. It has orders and equally distanced value between units. The zero point characteristic makes it relevant or meaningful to say, “one object has twice the length of the other” or “is twice as long.”

2. Ratio scale doesn’t have a negative number, unlike interval scale because of the absolute zero or zero point characteristic. To measure any object on a ratio scale, researchers must first see if the object meets all the criteria for interval scale plus has an absolute zero characteristic.

3. Ratio scale provides unique possibilities for statistical analysis. In ratio scale, variables can be systematically added, subtracted, multiplied and divided (ratio). All statistical analysis including mean, mode, the median can be calculated using ratio scale. Also, chi-square can be calculated on ratio scale variable.

4. Ratio scale has ratio scale units which have several unique and useful properties. One of them is they allow unit conversion. Take an example of calculation of energy flow. Several units of energy occur like Joules, gram-calories, kilogram-calories, British thermal units. Still more units of energy per unit time (power) exist kilocalories per day, liters of oxygen per hour, ergs, and Watts.