Yearly Salary is an example of __ data.
a.nominal
b.ordinal
c.interval
d.ratio
The correct answer and explanation is :
The correct answer is:
d. Ratio
Explanation:
Yearly salary is an example of ratio data, which is a type of quantitative data. Ratio data is the highest level of measurement in statistics and possesses the following characteristics:
- Numeric Values – Yearly salary is expressed in numerical terms (e.g., $50,000, $75,000).
- Meaningful Order – Salaries can be ranked in order, meaning a person earning $80,000 per year earns more than someone making $60,000 per year.
- Equal Intervals – The difference between two salaries (e.g., $60,000 and $80,000) is the same as another equal difference (e.g., $90,000 and $110,000). The intervals between values are meaningful and consistent.
- Absolute Zero – Ratio data has a true zero point, meaning the absence of the quantity being measured. A salary of $0 means no earnings at all. This distinguishes ratio data from interval data, which does not have a meaningful zero (e.g., temperature in Celsius, where 0°C does not indicate the absence of temperature).
- Ratio Comparisons – Because of the absolute zero, meaningful ratio comparisons can be made. For example, someone earning $100,000 per year makes twice as much as someone earning $50,000 per year.
Why Other Options Are Incorrect:
- Nominal (a): Nominal data consists of categories without any inherent order (e.g., job titles, department names). Salary is numerical and has a clear order, so it is not nominal.
- Ordinal (b): Ordinal data has an order but does not have equal intervals (e.g., employee satisfaction levels: “Satisfied,” “Neutral,” “Dissatisfied”). Salary has meaningful differences, so it is not ordinal.
- Interval (c): Interval data has meaningful differences but lacks a true zero (e.g., temperatures in Celsius). Salary has a true zero, so it is not interval data.
Thus, yearly salary is best classified as ratio data.