Final answer:
Observational research does observe people in real-world settings, known as naturalistic observation or field research. It provides high ecological validity but comes with the downside of less control over the environment and unpredictable elements.
Step-by-step explanation:
Observational research indeed observes people in real-world settings. This type of research, also known as field research or naturalistic observation, is carried out in the subject's natural environment. These settings could range from a coffee shop to a tribal village, a homeless shelter to a DMV, or even a hospital. The researcher interacts with or observes people without attempting to manipulate the setting, thus capturing valid, real-life data from realistic situations.
The primary benefits of this research method include high ecological validity, which refers to the accuracy of information collected unobtrusively in a natural setting. It enhances the generalizability of the findings to real-world situations because behaviors are observed without the influence of being in a controlled environment like a laboratory.
However, the major downside of naturalistic observation is the lack of control which can make the research challenging to set up and control. There could be unpredictable elements such as the subject's absence or relocation. Despite this challenge, methods like participant observation allow researchers to immerse themselves in the subjects' world, offering a valuable perspective on their social environment and behaviors.