In measuring, one devises some form of scale and then transfers the observation of property indicants onto this scale. Several type of scales are possible; the appropriate choice depends on what you assume about the mapping rules. Each scale has its own set of underlying assumptions about how the numerals correspond to real world observations.
Nominal scales are the least powerful of the four types. They suggest no order or distance relationship and have no arithmetic origin. The scale wastes any information about varying degree of the property being measures.
Since the only quantification is the number count of cases in each category, the researcher is restricted to the use of the mode as the measure of central tendency.
Ordinal scales include the characteristics of the nominal scale plus an indicator of order. Ordinal scales are possible if the transitivity postulate is fulfilled. This postulate states: If a is greater than b and b is greater than c, then a is greater than c. The use of an ordinal scale implies a statement of “greater than” or “less than” (an equality statement is also acceptable) without stating how much greater or less. Like a rubber yardstick, it can stretch varying amounts at different places along its length. Thus, the real difference between ranks 1 and 2 may more or less than the different between ranks 2 and 3.
The interval scale has the powers of nominal and ordinal scales plus one additional strength: It incorporates the concept of equality of interval (the distance between 1 and 2 equals the distance between 2 and 3). Calendar time is such a scale. For example, the elapsed time between 3 and 6 A.M. equals the time between 4 and 7 A.M. One cannot say, however, 6 A.M. is twice as late as 3 A.M. because “zero time” is an arbitrary origin. Centigrade and Fahrenheit temperature scales are other examples of classical interval scales. Both have an arbitrarily determined zero point.
Ratio scales incorporate all of the powers of the previous ones plus the provision for absolute zero or origin. The ratio scale represents the actual amount of a variable. Measures of physical dimensions such as weight, height, distance, and area are examples. In the behavioral sciences, few situations satisfy the requirements of the ratio scale – the area of psychophysics offering some exception. In business research, we find ratio scales in many area. There are money values, population counts, distances, return rates, and amount of time in a time-period sense.