This document discusses concepts related to measurement and scaling in business research. It covers determining what to measure, levels of scale measurement (nominal, ordinal, interval, ratio), forming indexes and composite measures, criteria for good measurement (reliability, validity, sensitivity), and assessing reliability and validity. Examples are provided to illustrate these concepts. The key topics covered are levels of measurement, forming composite measures, and ensuring good measurement through reliability and validity.

1. 13
©2013 Cengage Learning. All Rights Reserved. May
not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.
Measurement and
Scaling Concepts
Business Research Methods 9e
Chapter 13
Measurement and Scaling
Concepts

2. LEARNING
OUTCOMES
©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1. Determine what needs to be measured to
address a research question or hypothesis
2. Distinguish levels of scale measurement
3. Know how to form an index or composite
measure
4. List the three criteria for good measurement
5. Perform a basic assessment of scale reliability
and validity
13-2

3. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Money Matters?
13-3
• A company wants to
perform a customer
relationship
management (CRM)
employee evaluation
process that will allow
an overall ranking of all
CRM employees.
• Key question is, “What is
performance?”

4. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–4
What Do I Measure?
• Measurement
• The process of describing some property of a
phenomenon, usually by assigning numbers in
a reliable and valid way.
• Concept
• A generalized idea about a class of objects,
attributes, occurrences, or processes

5. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
EXHIBIT 13.1 Are There Any Validity Issues with This
Measurement?
13–5

6. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–6
Operational Definitions
• Operationalization
• The process of identifying scales that correspond to variance in
a concept involved in a research process.
• Scales
• A device providing a range of values that correspond to
different characteristics or amounts of a characteristic
exhibited in observing a concept.
• Correspondence rules
• Indicate the way that a certain value on a scale corresponds to
some true value of a concept.
• Constructs
• Concepts measured with multiple variables.

7. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Peer Pressure and Investing Behavior
13-7
• Some individuals are more
susceptible to peer pressure
than others—even for less
visible products and services,
such as investments.
• Researchers examined the
construct susceptibility to
interpersonal influence (SCII)
and found it does influence
investment behavior.

8. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–8
Levels of Scale Measurement
• Nominal
• Assigns a value to an object for identification or
classification purposes.
• Most elementary level of measurement.
• Ordinal
• Ranking scales allowing things to be arranged
based on how much of some concept they
possible.
• Have nominal properties.

9. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
EXHIBIT 13.4 Nominal, Ordinal, Interval, and Ratio
Scales Provide Different Information
13–9

10. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–10
Levels of Scale Measurement (cont’d)
• Interval
• Capture information about differences in
quantities of a concept.
• Have both nominal and ordinal properties.
• Ratio
• Highest form of measurement.
• Have all the properties of interval scales with
the additional attribute of representing
absolute quantities.
• Absolute zero.

11. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–11
• Discrete Measures
• Measures that can take on only one of a
finite number of values.
• Continuous Measures
• Measures that reflect the intensity of a
concept by assigning values that can take on
any value along some scale range.
Mathematical and Statistical Analysis of
Scales

12. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–12
Index Measures
• Attributes
• Single characteristics or fundamental features that
pertain to an object, person, or issue.
• Index Measures
• Assign a value based on how much of the concept
being measured is associated with an observation.
• Indexes often are formed by putting several
variables together.
• Composite Measures
• Assign a value to an observation based on a
mathematical derivation of multiple variables.

13. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–13
Computing Scale Values
• Summated Scale
• A scale created by simply summing (adding
together) the response to each item making up
the composite measure.
• Reverse Coding
• Means that the value assigned for a response is
treated oppositely from the other items.

14. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Recoding Made Easy
13-14
1. Click on transform.
2. Click on recode.
3. Choose to recode into
the same variable.
4. Select the variable(s) to
be recoded.
5. Click on old and new
values.
6. Use the menu that
appears to enter the old
values and the matching
new values. Click add
after entering each pair.
7. Click continue.

15. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–15
Three Criteria for Good Measurement
Sensitivity
Reliability Validity
Good
Measurement

16. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–16
Reliability
• Reliability
• The degree to which measures are free from random
error and therefore yield consistent results.
• An indicator of a measure’s internal consistency.
• Internal Consistency
• Represents a measure’s homogeneity or the extent to
which each indicator of a concept converges on some
common meaning.
• Measured by correlating scores on subsets of items
making up a scale.

17. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–17
Internal Consistency
• Split-half Method
• Assessing internal consistency by checking the
results of one-half of a set of scaled items
against the results from the other half.
• Coefficient alpha (α)
• The most commonly applied estimate of a
multiple item scale’s reliability.
• Represents the average of all possible split-half
reliabilities for a construct.

18. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–18
Test-Retest Reliability
• Test-retest Method
• Administering the same scale or measure to
the same respondents at two separate points
in time to test for stability.
• Represents a measure’s repeatability.
• Problems:
• The pre-measure, or first measure, may
sensitize the respondents and subsequently
influence the results of the second measure.
• Time effects that produce changes in attitude
or other maturation of the subjects.

19. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–19
Validity
• Validity
• The accuracy of a measure or the extent to which a
score truthfully represents a concept.
◗Does a scale measure what was intended to be
measured?
• Establishing Validity:
• Is there a consensus that the scale measures what
it is supposed to measure?
• Does the measure correlate with other measures
of the same concept?
• Does the behavior expected from the measure
predict actual observed behavior?

20. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–20
Validity (cont’d)
• Face Validity
• A scale’s content logically appears to reflect what was intended to
be measured.
• Content Validity
• The degree that a measure covers the breadth of the domain of
interest.
• Criterion Validity
• The ability of a measure to correlate with other standard
measures of similar constructs or established criteria.
• Construct Validity
• Exists when a measure reliably measures and truthfully represents
a unique concept.

21. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–21
Validity (cont’d)
• Convergent Validity
• Another way of expressing internal consistency;
highly reliable scales contain convergent
validity.
• Discriminant Validity
• Represents how unique or distinct is a
measure; a scale should not correlate too
highly with a measure of a different construct.

22. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
EXHIBIT 13.7 Reliability and Validity on Target
13–22

23. ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13–23
Sensitivity
• Sensitivity
• A measurement instrument’s ability to
accurately measure variability in stimuli or
responses.
• Generally increased by adding more response
points or adding scale items.