Hi Grenith,
Whether it is reasonable to treat the variables as numerical depends on several issues, including (a) the number of levels, particularly in the response (dependent) variable and (b) the adequacy of the scores used for the numerical values, specifically in their ability to capture the nature of any relevant associations. If the number of levels in Y is too small, then a linear regression is probably not good at all and is quite likely to make predictions that lie beyond the range of scores.
Two alternatives are (1) loglinear modeling of the counts in combinations of variables, if ALL variables are categorical (nominal or ordinal) and the combinations of variable levels are mostly populated, or (2) multinomial regression modeling. The former is often easier to conduct and interpret; the latter is more flexible in the sense that it allows continuous variables.
To make use of ordering, you need to add assumptions. In the loglinear model, you need to substitute scores for the variable levels in the models for associations (interactions) between DV and and IVs of interest. In the multinomial regression, you need to make assumptions relating to the ways in which the odds ratios of the DV relate to explanatory variables (typically "proportional odds").
All of these ideas are detailed in the book referenced in my signature below. Unfortunately, it's not due out until the end of the month...
Good luck.
-Tom.
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Thomas Loughin
Simon Fraser University
Coauthor, Analysis of Categorical Data with R, CRC Press
http://www.crcpress.com/product/isbn/9781439855676 -------------------------------------------