Hapiness research

While happiness research certainly has its weaknesses, certain findings are interesting, say, that the loss of happiness from losing a job is much greater than that attributable to the lost income. Standard utility theory can't really substitute for these kinds of insights.




There are four different Levels of Measurement, the mathematics and interpretation of which have been worked out in detail. Economists certainly use all of them, perhaps sometimes without knowing that they are.

An example is Interval Measurement, which is used in the measurement of temperature, as in the Celsius and Fahrenheit scales.

Taking it from the top, there are:
Ratio Measurement, the one often used in economics, which allows all the arithmetic operations; an example is the Kelvin scale of temperature, which starts at absolute zero.

But also used in economics and the other sciences are:
Interval Measurement, which allows interpretation of ratios of differences, so that, for example, one difference can be said to be twice another, also arithmetic means are interpretable, as well as medians and modes. Can you think of an example used in economics? ( HInt: start by thinking of economic concepts analogous to temperature, like things heating up or cooling down; if such things have a bottom analogous to absolute zero, they are ratio measurements, otherwise not.)

Ordinal Measurement, which allows comparisons of greater and less, also equality and inequality; here the central tendency can be expressed by the median. Examples are the Mohs Scale (of mineral hardness), measures of attitudes and preferences (some economists use those, I think) and many, many other constructs in psychology and other social sciences, including economics.

Finally, Nominal Measurement, which put things into categories, for which the mode is the meaningful measure of central tendency. I'd be willing to bet that economists put things into categories; if so they are using nominal measurement scales.

Source:Bruce K. Britton
http://econlog.econlib.org/archives/2007/02/subjective_rela.html