A short summary and guide on sample size

When stakeholder question about sample size?

When stakeholder question about sample size?
A good sample size (N): General answer is 10% of population or minimum 100. 

Sample example:
Say, we would like to understand customer sentiment about our new cloud offering in US market and for that we first need to determine the total population or list of possible companies that will buy our offering. One way to look at this is to identify companies greater than 100 million USD.

Based on US census (2013), here is the list

• revenue range – – number of companies
• $0 to $25M -- 5,640,800
• $25M to $100M -- 62,968
• $100M to $250M -- 211
• $250M to 500M -- 572
• $500M to $1B -- 1,069
• $1B to $2B -- 500
• $2B to $5B -- 152
• $5B to $10B -- 53
• More than $10B -- 27

 Clearly, we can calculate companies greater than 100M in US and there count is  2584

Answer: In order to understand this group (population) sentiment with accuracy we need 10% sample i.e. 258 (this is max) and min is 100 (Based on most statisticians.)

How did we come up with this sample size? Below is an explanation
 
Thumb rule:

• Even for higher population say 200k, A good maximum sample size is usually 10% as long as it does not exceed 1000.  For example, in a population of 5000, 10% would be 500. In a population of 200,000, 10% would be 20,000. This exceeds 1000, so in this case the maximum would be 1000. Even in a population of 200,000, sampling 1000 people will normally give a fairly accurate result. Sampling more than 1000 people won’t add much to the accuracy given the extra time and money it would cost.

 

• The minimum sample size is 100. Most statisticians agree that the minimum sample size to get any kind of meaningful result is 100. If your population is less than 100 then you really need to survey all of them.

Choose a number closer to the minimum sample size if:

• You only need a rough estimate of the results.
• You don’t plan to divide the sample into different groups during the analysis, or you only plan to use a few large subgroups (e.g. males / females).
• You think most people will give similar answers.
• The decisions that will be made based on the results do not have significant consequences.

Choose a number closer to the maximum same size if:

• It is very important to get accurate results.
• You plan to divide the sample into many different groups during the analysis (e.g. different age groups, socio-economic levels, etc).
• You think people are likely to give very different answers.
• The decisions that will be made based on the results of the survey are important, expensive or have serious consequences.

How margin of error play a role, scientific rule.

You will see on this table that the smallest samples are still around 100, and the biggest sample (for a population of more than 5000) is still around 1000. The same general principles apply as before – if you plan to divide the results into lots of sub-groups, or the decisions to be made are very important, you should pick a bigger sample.