A ll sciences are based on observation, in the broadest sense of the term. In this sense, ‘observation’ is not the same as ‘looking at things’. It refers to any means of gathering data about the world around us, including using specialist equipment that enables us to ‘observe’ the furthest reaches of the universe, or to ‘observe’ the behaviour of neurons in the human brain.
All research in psychology is, by definition, based on observation. We observe the answers that our participants give on our questionnaires, the responses of interviewees to our semi-structured interviews, and the performances of participants in our experiments (the dependent variable is often measured by observation). But when we talk about ‘observational methods’ we are really referring to a set of methods that are, more literally, based on watching (and listening to) things that happen, and recording stuff about those things.
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