What is Margin of Error? | Market Research Firm in Central New York

What is Margin of Error? | Market Research Firm in Central New York

Margin of error is a term commonly used in market research. It's the accepted standard for reliability of data with probability and random sampling. It tells us within a certain confidence, how accurate our data really is. But it is often a difficult concept to explain to those not well-versed in statistics or market research.

Margin of error typically coincides with three different confidence levels in statistics - either 90%, 95% or 99%. For example, let's say the report you are reading says the data incurs a margin of error of 2% at the 95% confidence interval. What this means is that if your survey were conducted again with another random sample of respondents, 95 out of 100 times results would yield within 2 percentage points of their stated totals. Typically, the 95% confidence interval is commonly applied. So if 78% of your customers indicated they are satisfied with your product, you can tell your boss that you are 95% confident that anywhere from 76% to 80% of your customers are satisfied (applying the +/- 2% range).

With the emergence of online surveys, panels, and convenience samples that do not use a probabilistic sampling methodology, margin of error cannot be applied. So although obtaining more completes and more data can be considered more reliable, it is not recommended a margin of error be estimated. Convenience samples incur many forms of bias including self-selection bias and snowball sampling.


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