Answer to Question #90853 in Accounting for Jane Lee

Question

Describe the differences between quantitative and qualitative data in relation to budgeting. What are some advantages and disadvantages of each approach?

Answer 1

Quantitative data is often numerical and analyzed using statistical methods such as mean and variance whereas qualitative method is only measurable after conversion to quantitative data. Qualitative data cannot be used to conclusively explain the reasons for occurrence of an observation. Additionally and when qualitative data is converted into quantitative data it becomes too simple and loses meaning.

Qualitative data is efficient in representing descriptive statistics but is limiting in terms of interpretation for instance employee surveys would report positive approval rating of new tax regime but fail to provide consistent expiations for the causes. Qualitative data is also collected in flexible means as compared to quantitative where the procedure is uniform and predetermined.

Since qualitative data collection varies with circumstances and lacks a standard basis, it is less likely to be automated and only few subjects can be reached in one research session. Few subjects imply relatively low statistical power with qualitative data.