Chapter 10

DQ#4 An official in the financial office is considering an applicant for financial aid. The
officer uses the following process. If the student has a GPA in the 90 th percentile among
the admission group, 5 points are added. If the student has an ACT or SAT score in the
90th percentile among the admission group, 5 points are added. If the student comes
from a family whose cumulative household income was less than $70,000/year for the
last 3 years, 8 points are added. If the student is from out of state, 5 points are added.
What variables are being used to determine eligibility for this financial aid? What would
your approximate score be on this scale? Is it best described as an index or a
composite scale? Explain your response.
The variables that are being used to determine eligibility for financial aid include GPA,
ACT/SAT score, household income for the last 3 years, and out of state resident. All
these variables are on a point system to determine financial aid. The more points a
student has from the point system the more potential they have to obtain financial aid.
According to the point system my approximate score on the scale would be 13. I have a
GPA of 3.86, which I believe would put me in the 90th percentile so I would receive 5
points. I have never taken the ACT or SAT; therefore, I would receive 0 points. My
household income would be less than $70,000 per year for the last 3 years; so I would
receive 8 points. I’m not from out of state; hence, I would receive 0 points.
This is best described as an index scale. The index assigns a value based on how
much of the concept being measured is associated with an observation. Indexes are
formed by putting several variables together systematically. When considering an
applicant for financial aid the official from the financial office basis the decision on
variables including the student’s GPA, ACT/SAT score, household income, and being
from out of state. These variables are put together systematically in determining
financial aid with assigning a point system to each variable.

DQ#12 Indicate whether the following measures use a nominal, ordinal, interval, or ratio
scale:
a. Prices on the stock market: Ratio scale since stock prices deal with money and
it’s possible that a stock can have a zero value. Also, ratio scales represents
absolute quantities.
b. Marital status, classified as “married” or “never married”: Nominal scale because
the value is an object for identification or classification purpose.
c. Whether a respondent has ever been unemployed: nominal scale since this the
information isn’t represented by quantities. This is just a yes or no question.
d. Professorial rank: assistant professor, associate professor, or professor: Ordinal
scale because this is a ranking scale of professional professors. With ordinal
 scale the order of the value is what is important not the differences between each
one.
e. Course grades: A, B, C, D, or F: Ordinal scales since grades are a ranking scale.
The “A” represents greater performance than “B”, which is greater performance
than “B”, and so forth.
f. Blood-alcohol content: Interval scale since the information is known not only in
order but as the exact difference between values. The blood-alcohol is a set
value that is consistent and measureable and there is a space in between each
value. The space in between the legal limit of the blood-alcohol content to a
person being tested tells whether a person is legally intoxicated or not.
g. Number of Facebook friends: Ratio scale because you can have zero friends on
Facebook. The number would represent absolute quantities of friends.
h. The color of one’s eyes: Nominal scale since eye color is a variable that is a label
not a number value. The scale for color of eyes is mutually exclusive and it does
not have any numerical significance.
i. The size of one’s pupils: Not really sure but I do know that the pupil’s change
size depending on the amount of light. The more light the smaller the pupil
becomes and less light the larger the pupil. Depending on how often the pupil is
measured the value would be discrete and would never be zero. I believe it
would be interval scale.

DQ#20 In each of the following, identify the type of scale and evaluate it:
a. A U.S. representative’s questionnaire sent to constituents (Do you favor or
oppose the Fair Tax Proposal?): Category scale that consists of three response
categories which are in favor, opposed, and no opinion. This provides
respondents with alternatives to indicate positions on this continuum.
b. How favorable are you toward the Fair Tax Proposal (very unfavorable – very
favorable): Likert scale considering this is measuring attitudes of respondents
whether they are very favorable to very unfavorable of the Fair Tax Proposal.
The statement needs to be carefully constructed and ranges from very positive to
very negative attitudes toward an object.
c. A psychographic statement asking the respondent to circle the appropriate
response (I shop a lot for specials: strongly disagree, disagree, neutral, agree,
strongly agree): Likert scale on account of the statement “I shop a lot for
specials” is carefully constructed and the response from respondents ranges
from strongly agree to strongly disagree. So the range of responses goes from
very positive to very negative.

Reference
Zikmund, W.G., & Babin, B. (2013). Essentials of Marketing Research. Australia: South-
Western Cengage Learning

Instructor’s comments
DB#20 My comment is regarding b). Your response identifies this question as using the Likert (or I call it
"Like It") scale. Our course textbook would say that b) is using a semantic differential scale. I find that our
textbook tries to make a distinction between semantic differential and Likert. My "old" textbook ("Market
Research and Analysis" by Donald Lehman, p. 191 2nd edition) clearly states that "a Likert scale is an
extension of a semantic scale.."

DQ#4 Your responses are correct for this question. Given the recent announced change to the SAT due
to a "correlation" between family income and test score, it may be hard to ignore the problems for
universities' financial aid offices using an index in which two of four variables are correlated. The
original intent of this index is to provide more aid to low-income students who score high on ACT/SAT.
I would be curious how NAU's financial aid office calculates financial aid need....Does anyone know?

DQ#12 Most of your responses to DQ#12 are correct. For the blood-alcohol content question, there is an
absolute zero measurement so that scale would be ratio (Zikmund, p. 253). For i), you identified pupil size
as an interval scale. I am accepting your response even though the textbook wants ratio scale. I have not
found any information about pupils contracting to a zero size. Given that an absolute zero measurement
defines ratio from interval, I will accept interval.