1. Business Research for Decision Making Sixth Edition by Duane Davis Chapter 7 Foundations of Measurement
PowerPoint Slides for the Instructor’s Resource Manual for

2. Foundations of Measurement
concerned with the assignment of numbers to empirical rules according to a set of rules
goal is to translate characteristics and properties of empirical events into a form that can be analyzed.
Observable empirical events
Use of numbers to represent these events
A set of mapping rules
Necessary
Components:

3. Example of the Relationships Among the Three Components of Measurement
Figure 7.1

4. The Measurement Process
Figure 7.2
The Measurement Process

6. Levels of Measurement
Nominal
Ordinal
Interval
Ratio

7. Nominal Lowest level of measurement
Numbers assigned to categories but the numbers have no meaning
1= male; 2= female
1= sophomore; 2 = junior; 3= senior
Loss of information if other scales converted to nominal

8. Ordinal Rank order on some characteristic or property
Intelligence, aptitude, and personality test scores are generally ordinal
E.g. not amount of intelligence, but rank order of intelligence
No absolute zeros and the intervals are not equal.

9. Ordinal Example What is your age? 1 = under 18 2 = 18-22 3 = 22-30
4 = 30-40
5 = over 40

10. Ordinal Example Overall, I am satisfied with myself
1) strongly disagree
2) disagree
3) neutral
4) agree
5) strongly agree

11. Interval
One unit on the scale represents the same magnitude on the trait or characteristic being measured across the whole range of the scale.
For example, if anxiety were measured on an interval scale, then a difference between a score of 10 and a score of 11 would represent the same difference in anxiety as would a difference between a score of 50 and a score of 51.
Rare to non-existent in behavioral research

12. Ratio Have a true zero, so distance between points has meaning
Incorporate the properties of all other scales
What is your age?

13. Three Basic Types of Validity in Measurement
Table 7.2
Three Basic Types of Validity in Measurement

14. A B
a b
Construct
Measure
Predictive validity
Concurrent validity

15. Refers to the consistency and stability of a measurement scale.
Reliability
Refers to the consistency and stability of a measurement scale.
Generally use a coefficient of reliability to assess the reliability of a measure.
Can range from 0 to 1.0, with 1.0 perfect reliability.
Guidelines for Minimum Reliabilities:
0.7 for exploratory research
0.8 for basic research
0.9 or better in applied settings where important decisions will be made from scales

16. Methods for Reliability Assessment
1. Test-Retest Method
2. Alternative Forms
3. Internal Consistency
- Split-half
- Cronbach-Alpha/KR-20

17. Figure 7.3
Illustrations of Possible Reliability/Validity Situations in Measurement

18. Improving reliability
Write items that are unambiguous
Add more items of equal kind and quality
General rule of thumb is at least 3-4 items for any scale
Make the instructions clear and standard

19. Managerial Considerations (Why get involved?)
Bad measurement, no value to managers
Scaling sets limits on analysis
Global and international research compounds problems
Measurement issues are early in the business research process – compounds problems

20. Managerial Strategies for Ensuring Good Measurement
Require clearly defined constitutive concepts
Require operational definitions
Require multi-item scales when possible
Require validity, reliability and pretest assessments when possible
Require analytical foresight

21. Key Managerial Questions Pertaining to the Measurement Process
Exhibit 7.2
Key Managerial Questions Pertaining to the Measurement Process