Students with the Centre for the Study of African Economies (CSAE) at the University of Oxford are creating a wonderful public good. The Coders’ Corner is a collection of tips and tricks for implementing useful statistical techniques in common statistical software (e.g., mostly Stata). This product represents a tremendous service to the broader research community. Almost anyone reading this blog should check out previous posts.
Here is an excerpt from a recent paper published in Applied Economic Perspectives and Policy by John Gibson; entitled, “Are You Estimating the Right Thing? An Editor Reflects.”
Concepts such as subjective well-being, satisfaction, happiness, trust, measures of quality, and even standardized test scores are all measured using an ordinal variable. This means that we know the rank of the response categories (e.g. a respondent reporting being “very satisfied” indicates they are more satisfied than if they had reported being “satisfied”), but we do not know the interval between response categories (e.g. we don’t know how much more satisfied “very satisfied” is compared to “satisfied”). This is contrasted with cardinal variables, such as earnings, where we know $10 is more than $5 and represents twice as much money.