Content Type:

Glossary

Share Print

Margin of error Definition

A measurement of the accuracy of the results of a survey used to say how close a calculation is to the predicted value by a certain percentage. The margin of error expresses the amount of random sampling error in a survey's results. The larger the margin of error, the less confidence there is that the results are close to the "true" figures. The margin of error is computed on sample size and is only valid if the study was well designed and executed on a true random sample.

The margin of error in market research is a statistical measure that indicates the range within which the true value of a population parameter lies, based on sample data. It reflects the potential variation in results if the survey or experiment were repeated multiple times, providing a confidence range around survey results.

Who relies on a margin of error in market research?

Market researchers, data analysts, statisticians and decision makers rely on the margin of error to assess the reliability of survey results. It’s particularly useful for stakeholders who need to understand the level of accuracy in consumer insights, election polling and other survey-based studies.

What are key aspects of a margin of error in market research?

Key aspects include:

• Confidence level: Indicates the probability that the margin of error includes the true population parameter.
• Sample size: A larger sample size generally reduces the margin of error.
• Representation: Reflects how well the sample represents the population.
• Calculation: Depends on sample variability and distribution.

Why is a margin of error important in market research?

The margin of error is important because it helps researchers understand the reliability of their findings and the range within which the true population response likely falls. By accounting for potential sampling error, it enables researchers to make informed decisions and convey the accuracy of insights to stakeholders.

How do market researchers use a margin of error?

Market researchers use the margin of error to interpret survey results accurately, determining the range within which actual population preferences or behaviors likely lie. They report this margin alongside survey results, allowing clients and stakeholders to assess the precision of insights and the level of confidence in the findings.