Data collection by observation procedure has some advantages and limitations. The advantages are:

1. The direct recording of the data avoids problems such as incomplete or distorted recall.
2. Data can be obtained continuously over an extended period of time.

The limitations are:
1. The observer or the instrument to be used for data gathering must be able to record the events correctly. For example, human observers must get through training about the study and the data to be collected and so that different observers will record the same events in the same manner.
2. The individuals included in the study might be aware of this fact and then altered their behavior, decision or answers. This leads to bias in the study.