Research Topics:

Data Analysis | Quantitative Research

Content Type:

Glossary

Finite Population Correction Factor (FPC) Definition

An adjustment to the required sample size that is made in those cases in which the sample is expected to be equal to 5 percent or more of the total population.

The finite population correction factor, or FPC, is a statistical adjustment to sampling methods used in marketing research. It's used when the required sample size relative to the total population is expected to be equal to 5 percent or more of the total population, thus aiming to account for the finite nature of the population. The FPC corrects the standard error of the sample statistic, which is intended to improve accuracy of the estimation. By accounting for the finite nature of the population, the risk of underestimating the variability and potential characteristics within a target audience is reduced. This adjustment makes research outcomes and conclusions more credible.

Who relies on the finite population correction factor (FPC)?

Marketing researchers and analysts use the finite population correction factor when the total population is small, such as in niche markets or specific customer segments. The adjustment makes sure that the sample accurately represents the entire population.

Why should I care about the finite population correction factor (FPC)?

The finite population correction factor directly impacts the accuracy and relevance of research findings. By ignoring the FPC, marketing professionals risk uncovering misleading results, thus leading to poor decisions. Applying the FPC in scenarios with small and distinct populations is crucial in developing insights that reflect the preferences and behaviors of target audiences.