Difference Between Quantitative and Qualitative Analysis

In its general and broad definition, quantitative analysis is simply a way of giving measurement to things. With this definition, it is implied that in the field of business or financial for instance, quantitative analysis can be implemented for measurement, performance evaluation, valuation of the financial instrument and can be used to predict future real-world events (Investopedia, par. 2). In order to successfully implement all of these, the use of complex mathematical and statistical models, measurement research and giving numerical values to variables is what should a quantitative analyst needs to do in order to come up with mathematical replication of reality (Investopedia, par. 1).

On the other hand, not all information or data can be quantified. The presence of nonquantifiable information like management expertise, industry cycles, the strength of research and development and labor relations are the bases of subjective judgment that fall under qualitative analysis (Investopedia, par. 1). In its general term, qualitative analysis is about analyzing things without the presence of numbers. It can often be subjective. In business, qualitative analysis often gives many insights about the management that will not often show up in the quantitative analysis (Investopedia, par. 2).

It is clear that the major difference between quantitative analysis and qualitative analysis is the consideration of numbers. With quantitative analysis, there is quantifiable information involved. On the other hand, there is no quantifiable information present in qualitative analysis, but everything falls under subjective judgment. In business, it is important to combine these two in order to come up with a better view of the company’s performance or employees’ performance evaluation for instance. In other fields such as the academe, both qualitative analysis and quantitative analysis are very important.