What distinguishes an ordinal variable from a nominal variable?

An ordinal variable is characterized by its ability to represent ordered categories, which is the essence of ranking. This means that not only can the categories be identified, but they also have a meaningful sequence or hierarchy, allowing for comparisons regarding greater or lesser value. For example, in a survey where participants rank their satisfaction as "poor," "fair," "good," and "excellent," these categories can be clearly ordered by their level of satisfaction.

In contrast, nominal variables do not possess any inherent ranking; they merely categorize data without implying any order among the groups. Examples of nominal variables include gender, colors, or types of animals, where one category does not have a higher or lower status than another.

While it is true that ordinal variables may often have numeric representations (1 for "poor," 2 for "fair," etc.), the key distinction lies in their capacity for ranking rather than their numeric nature. Therefore, the core distinction between ordinal and nominal variables is the ranked order that ordinal variables embody.