What is Data Interpretation?

Once the data has been analysed, the next progressive step is to interpret the data.

Data interpretation is the process of assigning meaning to the processed and analyzed data. It
enables us to make informed and meaningful conclusions, implications, infer the significance
between the relationships of variables and explain the patterns in the data.

Explaining numerical data points and categorical data points would require different
methods; hence, the different nature of data demands different data interpretation techniques.

There are two primary techniques available to understand and interpret the data:

1. Quantitative, and
2. Qualitative

Quantitative Methods

The quantitative data interpretation technique is applicable for the measurable or numerical
type of data. The numerical data is of two types:

Discrete: countable, finite quantities. Eg: the number of ice-creams

Continuous: not countable. Eg: height, weight, time, speed, humidity, temperature

The numerical data is relatively easier to analyze using the statistical modeling methods,
including central tendency and dispersion measures. These can be visually depicted via charts
such as bar graphs, pie-chart, line graphs, line charts. Tables are also used in representing
complex information dissecting into categories.

There are two most commonly used quantitative data analysis methods are:

Descriptive Statistics: this field of statistics focuses on describing the data, its features. It
comprises of two categories: measures of central tendency (mean, median, mode, and
measures of dispersion or variability, which tell how much spread is there in the data or the
data varies.

Inferential Statistics: this branch of statistics generalizes or infers how the larger data is, its
features based on the sample taken from this larger data.

Qualitative Methods

Qualitative methods are implemented to analyze the textual and the descriptive data called
the categorical data. Text data is usually unstructured. The qualitative data is subdivided
further based on their characteristics:

Nominal: The attributes have no ranking or order. Eg: Region, Gender, Classes in school

Ordinal: The attributes are ranked or ordered in a sequence. Eg: Grades

Binary: It has only two categories. Either yes or no, Class 1 or 0.

Unlike numerical data, categorical data cannot be directly analyzed as the data here is non-
statistical, and also, the machines understand only the language of the numbers.

So, the text data is first coded and converted into numerical data. There are different coding
approaches available based on the requirement. The text data is categorized into labels to be
used for modeling and interpretation.

For a detailed comparison between the two methods of data interpretation, refer to this blog
on How to Understand the Quantitative and Qualitative Data in Your Business.

Importance of Data Analysis and Interpretation

Data analysis aims to bring order and structure to data by manipulating, summarizing, and
reducing it to an interpretable form. It helps to uncover the patterns in the data. Data
interpretation aims to execute and apply processes that assign meaning to these discovered
patterns by analyzing data. It draws statistical conclusions, infers the relationships and
implications.

For instance, the business objective of the retailer is to recommend products to customers
based on the past data it has collected. We start understanding the characteristics of the
current and former customers. This is data analysis as it only states how the data is. Once we
start examining and postulating the customers based on their similar characteristics, that is
data interpretation. This is where assumptions are made, such as customers who buy X
brand’s products also tend to buy products from another similar brand. Here, we are thinking
beyond the data and seeing the underlying reasoning behind the data about the real
implications.

Following are the reasons why the data analysis and interpretation are important:

1. Informed decision-making:

Data analysis and interpretation are instrumental in making informed decisions, relying on
data, applying methodical analysis techniques, and not intuition or guessing. This requires a
very systematic and structured data collection process to be implemented.

2. Identification of trend and forecasting needs:

Data analysis offers insights that can predict and set trends that can positively impact an
industry level. When a lot of people started viewing web series and movies on online
platforms. The producers started making, releasing more OTT content, and this trend picked
up and has changed the dynamics of the entertainment industry.

3. Cost-efficient:

One of the most important goals for any business apart from maximum returns is to reduce
costs. Data-driven informed decisions not only help in improving business metrics but also in
reducing costs, which is another avenue of generating revenue. Predictive data analytics helps
achieve this objective by using response modeling, uplift response modeling, churn modeling,
churn uplift modeling, risk modeling, and fraud detection.

4. Clear Insights:

These processes allow organizations to get foresight in their performance and processes. It
enables the companies to know how customers view them and their limitations and take
actionable measures to improve their performance.

What is the difference between Data Analysis and Interpretation?

Data analysis and interpretation transform the collected data into story points to drive
insights. There are differences between the two processes, which follows as:

Data Analysis Data Interpretation

Meaning Data analysis is the process of uncovering Data interpretation is the process of
patterns and trends in the data. assigning meaning to the data. It
involves explaining those discovered
patterns and trends in the data.
Chronology Data analysis comes first, followed by Data interpretation is the next
data interpretation. proceeding step after data analysis.
Types/Methods The five types of data analysis are The data interpretation methods are
Descriptive Analysis, Diagnostic Analysis, Quantitative Methods and
Predictive Analysis, Prescriptive Analysis, Qualitative Methods.
 and Cognitive Analysis.
Why is it To summarize, condense data in a Data interpretation is required
needed? comprehensible and usable form for because the numbers can not speak
further advanced analytics and prediction.for themselves. It needs manual
human intervention to understand
what the numbers are saying.
Example For example, the top 5 teams in terms of An example of interpretation is what
the winning Percentages are Real Madrid, does it imply 95% of the population
Barcelona, Atletico Madrid, Valencia, and lies within the range of 136.54 to
Athletic Bilbao. 143.45.

Quantitative vs Qualitative Data: What’s the Difference?

Quantitative data is anything that can be counted or measured; it refers to numerical data.
Qualitative data is descriptive, referring to things that can be observed but not measured—
such as colors or emotions.

1. What is the difference between quantitative and qualitative data?

When it comes to conducting research and data analysis, you’ll work with two types of data:
quantitative and qualitative. Each requires different collection and analysis methods, so it’s
important to understand the difference between the two.

Quantitative data

Quantitative data refers to any information that can be quantified. If it can be counted or
measured, and given a numerical value, it’s quantitative data. Quantitative data can tell you
“how many,” “how much,” or “how often”—for example, how many people attended last
week’s webinar? How much revenue did the company make in 2019? How often does a
certain customer group use online banking?
To analyze and make sense of quantitative data, you’ll conduct statistical analyses

Qualitative data

Unlike quantitative data, qualitative data cannot be measured or counted. It’s descriptive,
expressed in terms of language rather than numerical values.

Researchers will often turn to qualitative data to answer “Why?” or “How?” questions. For
example, if your quantitative data tells you that a certain website visitor abandoned their
shopping cart three times in one week, you’d probably want to investigate why—and this
might involve collecting some form of qualitative data from the user. Perhaps you want to
know how a user feels about a particular product; again, qualitative data can provide such
insights. In this case, you’re not just looking at numbers; you’re asking the user to tell you,
using language, why they did something or how they feel.

Qualitative data also refers to the words or labels used to describe certain characteristics or
traits—for example, describing the sky as blue or labeling a particular ice cream flavor as
vanilla.

Main differences between quantitative and qualitative data

The main differences between quantitative and qualitative data lie in what they tell us, how
they are collected, and how they are analyzed. Let’s summarize the key differences before
exploring each aspect in more detail:

 Quantitative data is countable or measurable, relating to numbers. Qualitative data is

descriptive, relating to language.
 Quantitative data tells us how many, how much, or how often (e.g. “20 people signed
up to our email newsletter last week”). Qualitative data can help us to understand the
“why” or “how” behind certain behaviors, or it can simply describe a certain attribute
—for example, “The postbox is red” or “I signed up to the email newsletter because
I’m really interested in hearing about local events.”
 Quantitative data is fixed and “universal,” while qualitative data is subjective and
dynamic. For example, if something weighs 20 kilograms, that can be considered an
objective fact. However, two people may have very different qualitative accounts of
how they experience a particular event.
 Quantitative data is gathered by measuring and counting. Qualitative data is collected
by interviewing and observing.
 Quantitative data is analyzed using statistical analysis, while qualitative data is
analyzed by grouping it in terms of meaningful categories or themes.

The difference between quantitative and qualitative data: An example

To illustrate the difference between quantitative and qualitative data, let’s use an example.
Imagine you want to describe your best friend. What kind of data might you gather or use to
paint a vivid picture?
First, you might describe their physical attributes, such as their height, their hair style and
color, what size feet they have, and how much they weigh. Then you might describe some of
their most prominent personality traits. On top of that, you could describe how many siblings
and pets they have, where they live, and how often they go swimming (their favorite hobby).

All of that data will fall into either the quantitative or qualitative categories, as follows:

Quantitative data:

 My best friend is 5 feet and 7 inches tall

 They have size 6 feet
 They weigh 63 kilograms
 My best friend has one older sibling and two younger siblings
 They have two cats
 My best friend lives twenty miles away from me
 They go swimming four times a week

Qualitative data:

 My best friend has curly brown hair

 They have green eyes
 My best friend is funny, loud, and a good listener
 They can also be quite impatient and impulsive at times
 My best friend drives a red car
 They have a very friendly face and a contagious laugh

Of course, when working as a researcher or data analyst, you’ll be handling much more
complex data than the examples we’ve given. However, our “best friend” example has
hopefully made it easier for you to distinguish between quantitative and qualitative data.

Different types of quantitative and qualitative data

Quantitative data is either discrete or continuous:

Discrete quantitative data takes on fixed numerical values and cannot be broken down
further. An example of discrete data is when you count something, such as the number of
people in a room. If you count 32 people, this is fixed and finite.

Continuous quantitative data can be placed on a continuum and infinitely broken down into
smaller units. It can take any value; for example, a piece of string can be 20.4cm in length, or
the room temperature can be 30.8 degrees.

Some everyday examples of quantitative data include:

 Measurements such as height, length, and weight

 Counts, such as the number of website visitors, sales, or email sign-ups
  Calculations, such as revenue
 Projections, such as predicted sales or projected revenue increase expressed as a
percentage
 Quantification of qualitative data—for example, asking customers to rate their
satisfaction on a scale of 1-5 and then coming up with an overall customer satisfaction
score

Types of qualitative data

Qualitative data may be classified as nominal or ordinal:

Nominal data is used to label or categorize certain variables without giving them any type of
quantitative value. For example, if you were collecting data about your target audience, you
might want to know where they live. Are they based in the UK, the USA, Asia, or Australia?
Each of these geographical classifications count as nominal data. Another simple example
could be the use of labels like “blue,” “brown,” and “green” to describe eye color.

Ordinal data is when the categories used to classify your qualitative data fall into a natural
order or hierarchy. For example, if you wanted to explore customer satisfaction, you might
ask each customer to select whether their experience with your product was “poor,”
“satisfactory,” “good,” or “outstanding.” It’s clear that “outstanding” is better than “poor,”
but there’s no way of measuring or quantifying the “distance” between the two categories.

Nominal and ordinal data tends to come up within the context of conducting questionnaires
and surveys. However, qualitative data is not just limited to labels and categories; it also
includes unstructured data such as what people say in an interview, what they write in a
product review, or what they post on social media.

Some examples of qualitative data include:

 Interview transcripts or audio recordings

 The text included in an email or social media post
 Product reviews and customer testimonials
 Observations and descriptions; e.g. “I noticed that the teacher was wearing a red
jumper.”
 Labels and categories used in surveys and questionnaires, e.g. selecting whether you
are satisfied, dissatisfied, or indifferent to a particular product or service.

How are quantitative and qualitative data collected?

One of the key differences between quantitative and qualitative data is in how they are
collected or generated.

How is quantitative data generated?

Quantitative data is generated by measuring or counting certain entities, or by performing

calculations. Some common quantitative data collection methods include:
  Surveys and questionnaires: This is an especially useful method for gathering large
quantities of data. If you wanted to gather quantitative data on employee satisfaction,
you might send out a survey asking them to rate various aspects of the organization on
a scale of 1-10.
 Analytics tools: Data analysts and data scientists use specialist tools to gather
quantitative data from various sources. For example, Google Analytics gathers data in
real-time, allowing you to see, at a glance, all the most important metrics for your
website—such as traffic, number of page views, and average session length.
 Environmental sensors: A sensor is a device which detects changes in the
surrounding environment and sends this information to another electronic device,
usually a computer. This information is converted into numbers, providing a
continuous stream of quantitative data.
 Manipulation of pre-existing quantitative data: Researchers and analysts will also
generate new quantitative data by performing statistical analyses or calculations on
existing data. For example, if you have a spreadsheet containing data on the number
of sales and expenditures in USD, you could generate new quantitative data by
calculating the overall profit margin.

How is qualitative data generated?

Qualitative data is gathered through interviews, surveys, and observations. Let’s take a
look at these methods in more detail:

 Interviews are a great way to learn how people feel about any given topic—be it
their opinions on a new product or their experience using a particular service.
Conducting interviews will eventually provide you with interview transcripts
which can then be analyzed.
 Surveys and questionnaires are also used to gather qualitative data. If you
wanted to collect demographic data about your target audience, you might ask
them to complete a survey where they either select their answers from a number of
different options, or write their responses as freeform text.
 Observations: You don’t necessarily have to actively engage with people in order
to gather qualitative data. Analysts will also look at “naturally occurring”
qualitative data, such as the feedback left in product reviews or what people say in
their social media posts.

Quantitative vs qualitative data: methods of analysis

Another major difference between quantitative and qualitative data lies in how they are
analyzed. Quantitative data is suitable for statistical analysis and mathematical calculations,
while qualitative data is usually analyzed by grouping it into meaningful categories or
themes.
Quantitative data analysis

How you analyze your quantitative data depends on the kind of data you’ve gathered and the
insights you want to uncover. Statistical analysis can be used to identify trends in the data, to
establish if there’s any kind of relationship between a set of variables (e.g. does social media
spend correlate with sales), to calculate probability in order to accurately predict future
outcomes, to understand how the data is distributed—and much, much more.

Some of the most popular methods used by data analysts include:

 Regression analysis
 Monte Carlo simulation
 Factor analysis
 Cohort analysis
 Cluster analysis
 Time series analysis

Qualitative data analysis

With qualitative data analysis, the focus is on making sense of unstructured data (such as
large bodies of text). Given that qualitative data cannot be measured objectively, it is open to
subjective interpretation and therefore requires a different approach to analysis.

The main method of analysis used with qualitative data is a technique known as thematic
analysis. Essentially, the data is coded in order to identify recurring keywords or topics, and
then, based on these codes, grouped into meaningful themes.

Another type of analysis is sentiment analysis, which seeks to classify and interpret the
emotions conveyed within textual data. This allows businesses to gauge how customers feel
about various aspects of the brand, product, or service, and how common these sentiments are
across the entire customer base.

Traditionally, qualitative data analysis has had something of a bad reputation for being
extremely time-consuming. However, nowadays the process can be largely automated, and
there are plenty of tools and software out there to help you make sense of your qualitative
data. To learn more about qualitative analysis and what you can do with it, check out this
round-up of the most useful qualitative analysis tools on the market.

5. What are the advantages and disadvantages of quantitative vs qualitative data?

Each type of data comes with advantages and disadvantages, and it’s important to bear these
in mind when conducting any kind of research or sourcing data for analysis. We’ll outline the
main advantages and disadvantages of each now.

What are the advantages and disadvantages of quantitative data?

A big advantage of quantitative data is that it’s relatively quick and easy to collect, meaning
you can work with large samples. At the same time, quantitative data is objective; it’s less
susceptible to bias than qualitative data, which makes it easier to draw reliable and
generalizable conclusions.

The main disadvantage of quantitative data is that it can lack depth and context. The numbers
don’t always tell you the full story; for example, you might see that you lost 70% of your
newsletter subscribers in one week, but without further investigation, you won’t know why.

What are the advantages and disadvantages of qualitative data?

Where quantitative data falls short, qualitative data shines. The biggest advantage of
qualitative data is that it offers rich, in-depth insights and allows you to explore the context
surrounding a given topic. Through qualitative data, you can really gauge how people feel
and why they take certain actions—crucial if you’re running any kind of organization and
want to understand how your target audience operates.

However, qualitative data can be harder and more time-consuming to collect, so you may find
yourself working with smaller samples. Because of its subjective nature, qualitative data is
also open to interpretation, so it’s important to be aware of bias when conducting qualitative
analysis.

6. When should I use qualitative or quantitative data?

Put simply, whether you use qualitative or quantitative data (or a combination of both!)
depends on the data analytics project you’re undertaking. Here, we’ll discuss which projects
are better suited to which data.

Generally, you can use the following criteria to determine whether to go with qualitative data,
quantitative data, or a mixed methods approach to collecting data for your project.

 Do you want to understand something, such as a concept, experience, or opinions?

Use qualitative data.
 Do you want to confirm or test something, such as a theory or hypothesis? Use
quantitative data.
 Are you taking on research? You may benefit from a mixed methods approach to data
collection.

You may find that more often than not, both types of data are used in projects, in order to
gain a clear overall image—integrating both the numbers side and human side of things.

7. Key takeaways

We’ve defined quantitative and qualitative data and explained how they differ. What it really
boils down to, in very simple terms, is that quantitative data is countable or measurable,
relating to numbers, while qualitative data is descriptive, relating to language.
Understanding the difference between quantitative and qualitative data is one of the very first
steps towards becoming a data expert.