How is a nominal variable defined?

A nominal variable is characterized as categorical data that does not have any inherent order or ranking. This type of variable is used to label or identify different categories without implying any quantitative relationship among them. For example, variables like gender, race, or favorite color are nominal because they represent distinct categories that cannot be logically ordered.

In contrast, other types of variables, such as ordinal variables, have a clear ranking (like customer satisfaction ratings), continuous variables exhibit a range of numerical values (such as height or temperature), and ratio scale variables not only provide numeric values but also have a true zero point (like weight or age). Therefore, the defining feature of a nominal variable is its categorical nature without any order, making the choice identifying it as such the correct one.