Empirical Rule

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DEFINITION of 'Empirical Rule'

A statistical rule stating that for a normal distribution, almost all data will fall within three standard deviations of the mean. Broken down, the empirical rule shows that 68% will fall within the first standard deviation, 95% within the first two standard deviations, and 99.7% will fall within the first three standard deviations of the mean.

Also referred to as the Three Sigma Rule, or the 68-95-99.7 Rule.

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BREAKING DOWN 'Empirical Rule'

The Empirical Rule is most often used in statistics for forecasting final outcomes. After a standard deviation is calculated, and before exact data can be collected, this rule can be used as a rough estimate as to the outcome of the impending data. This probability can be used in the meantime as gathering appropriate data may be time consuming, or even impossible to obtain.

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