In statistics, what does a categorical variable refer to?

A categorical variable is one that represents distinct categories or groups. These categories are typically qualitative in nature and do not have an inherent order or ranking among them. For example, variables such as gender, color (e.g., red, blue, green), or type of car (e.g., SUV, sedan, truck) can be classified as categorical. Each category is used to group observations, and the analysis of such variables often involves counting the occurrences of each category rather than measuring them numerically.

The correct choice emphasizes the lack of intrinsic order among the categories, which is a defining characteristic of categorical variables. This is important in various statistical applications, as some analytical techniques are specifically designed to handle categorical data in a manner that respects the nature of the variable.

In comparison, variables that can be measured, exhibit consistent variation, or are classified as continuous do not align with the definition of categorical variables. Continuous variables represent numerical values that can take any value within a range, while measured variables typically imply a numeric scale that captures quantitative data. Categories in categorical variables remain distinct and do not form a numerical spectrum.