Likert scale

What Is Likert Scale?

A Likert scale is a psychometric measurement tool used in survey research to gauge the attitudes, opinions, and perceptions of respondents by presenting a range of ordered response options. It is a fundamental instrument within behavioral finance and market research, helping to quantify subjective experiences. The Likert scale typically uses a statement to which respondents indicate their level of agreement or disagreement, ranging from one extreme to another, often including a neutral midpoint. This method transforms qualitative feedback into structured data suitable for quantitative analysis, enabling researchers to understand sentiment across a population.

History and Origin

The Likert scale was developed in 1932 by Rensis Likert, an American social psychologist and educator. Likert devised this method as part of his doctoral dissertation, "A Technique for the Measurement of Attitudes," aiming to create a more efficient and precise way to evaluate people's subjective responses compared to existing methods. His approach provided a psychometrically sound scale that could measure attitudes and feelings towards various statements¹⁴.

Prior to Likert's work, methods like the Thurstone scale were used for attitude measurement, but they were often labor-intensive and expensive due to the need for "judges" to determine item scales¹³. Likert's innovation simplified this process by eliminating the need for such judges, allowing for easier construction and utilization of attitude scales¹². The Likert scale quickly became a cornerstone of psychometrics and remains the most widely used rating scale in survey research globally.

Key Takeaways

• The Likert scale measures attitudes and opinions using a range of ordered responses, typically from "Strongly Disagree" to "Strongly Agree."
• It was developed by Rensis Likert in 1932 to quantify subjective human sentiments.
• Commonly used in market research, social sciences, and behavioral finance to understand perceptions.
• Responses are generally treated as ordinal data, meaning the order is significant but the intervals between points may not be equal.
• Despite its simplicity, the Likert scale faces criticisms regarding potential biases and the appropriate statistical methods for its analysis.

Interpreting the Likert Scale

Interpreting a Likert scale involves analyzing the responses to understand the collective sentiment or perception regarding a particular statement. While individual responses are categorical, the combined results from multiple respondents allow for broader insights. For instance, in a five-point Likert scale (Strongly Disagree, Disagree, Neutral, Agree, Strongly Agree), a high concentration of responses towards "Agree" or "Strongly Agree" indicates a positive sentiment, whereas a skew towards "Disagree" suggests a negative one.

Researchers often calculate the mean or median of scores for each Likert item to summarize overall sentiment, although the ordinal nature of the data means that the mean should be interpreted with caution¹⁰, ¹¹. Assessing the dispersion of responses, such as through variance or standard deviation, can reveal if opinions are polarized or largely in agreement. Data analysis techniques like cluster analysis and cross-tabulation with demographic data further enrich the interpretation, uncovering underlying patterns in customer attitudes or employee engagement.

Hypothetical Example

Consider a hypothetical investment firm, "DiversiVest," launching a new Robo-advisor service and wanting to assess user satisfaction with its ease of use. They deploy a survey with a Likert scale question:

"The DiversiVest Robo-advisor platform is easy to navigate."

Respondents are given the following options:

1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree

If 1,000 users respond, and 600 select "Agree" or "Strongly Agree," while only 100 select "Disagree" or "Strongly Disagree," DiversiVest can infer a generally positive user experience regarding navigation. The remaining 300 selected "Neutral." This provides clear, actionable insights into user perception. Conversely, if a large portion selected "Disagree," it would signal a need for user interface improvements. This structured feedback helps the firm refine its financial products and services based on user sentiment.

Practical Applications

The Likert scale is extensively used across various fields, including finance, market research, and public policy. In finance, it can be applied to measure investor sentiment towards specific assets, market conditions, or economic policies. For example, a financial advisor might use a Likert scale to gauge a client's risk tolerance by asking them to agree or disagree with statements about potential investment losses.

Beyond individual financial planning, large organizations and government bodies leverage Likert scales for broader economic insights. The Federal Reserve, for instance, utilizes surveys, which may include Likert-scale questions, to collect information on household economics and decision-making, providing crucial data that informs monetary policy decisions⁸, ⁹. These surveys help understand consumer spending, inflation expectations, and perceptions of credit availability. Market research firms also employ Likert scales in customer satisfaction surveys to assess brand perception, product usefulness, and overall customer experience, guiding strategic business decisions⁶, ⁷.

Limitations and Criticisms

Despite its widespread use, the Likert scale is not without limitations and criticisms. A primary debate revolves around whether Likert scale data should be treated as interval data or strictly ordinal data. While the categories are ordered, the assumption that the psychological distance between each response option (e.g., between "Agree" and "Strongly Agree") is equal is often challenged⁴, ⁵. This impacts the choice of appropriate statistical methods; treating ordinal data as interval can lead to misinterpretations if the equal interval assumption is violated³.

Furthermore, Likert scales are susceptible to various response biases. Common issues include central tendency bias, where respondents avoid extreme categories and gravitate towards the "Neutral" option, and acquiescence bias, where individuals tend to agree with statements regardless of their true opinion¹, ². Social desirability bias can also influence responses, as individuals might select answers they perceive as more socially acceptable rather than their genuine views. Researchers must carefully design Likert scale questions and consider these biases during data collection and analysis to ensure the reliability and validity of their findings.

Likert Scale vs. Semantic Differential Scale

The Likert scale and the semantic differential scale are both popular tools for measuring attitudes, but they differ in their construction and the type of response they elicit.

A Likert scale typically presents a series of statements, and respondents indicate their level of agreement or disagreement with each statement using a symmetric agree-disagree continuum (e.g., Strongly Agree to Strongly Disagree). The focus is on the respondent's attitude towards the statement.

In contrast, a semantic differential scale asks respondents to rate a concept, object, or person on a series of bipolar adjectives. For instance, a product might be rated on scales like "Good – Bad," "Expensive – Cheap," or "Reliable – Unreliable." The respondent places their mark on a continuum between these opposing adjectives. The key difference is that the semantic differential scale directly assesses the connotative meaning of a concept, whereas the Likert scale measures agreement with a proposition. Both are valuable in market research and consumer behavior studies, but their applications depend on the specific research question and the nuance of attitude or perception being explored.

FAQs

What is a 5-point Likert scale?

A 5-point Likert scale is a common variation that provides five response options, typically ranging from "Strongly Disagree" to "Strongly Agree," with a "Neutral" midpoint. This structure is often used for its balance and clarity, making it easy for respondents to express their feelings across a spectrum.

Can a Likert scale have an even number of points?

Yes, a Likert scale can have an even number of points (e.g., 4-point or 6-point scales). When an even number of points is used, the "Neutral" or "Neither Agree Nor Disagree" option is intentionally removed. This forces respondents to lean towards either agreement or disagreement, which can be useful when researchers want to avoid a neutral stance and obtain more decisive opinions for specific financial decisions or product feedback.

Is the Likert scale only used in psychology?

No, while developed by a psychologist, the Likert scale is widely used across many disciplines beyond psychology. It is a cornerstone of social sciences, market research, public opinion polling, human resources, and increasingly in behavioral economics and finance to measure perceptions, satisfaction, and attitudes. Its versatility makes it a valuable tool for collecting structured qualitative data in various contexts.