Sampling Error

AAA

DEFINITION of 'Sampling Error'

A statistical error to which an analyst exposes a model simply because he or she is working with sample data rather than population or census data. Using sample data presents the risk that results found in an analysis do not represent the results that would be obtained from using data involving the entire population from which the sample was derived.

INVESTOPEDIA EXPLAINS 'Sampling Error'

The use of a sample relative to an entire population is often necessary for practical and/or monetary reasons. Although there are likely to be some differences between sample analysis results and population analysis results, the degree to which these can differ is not expected to be substantial.

Methods of reducing sampling error include increasing the sample size and ensuring that the sample adequately represents the entire population.

RELATED TERMS
  1. Representative Sample

    A subset of a statistical population that accurately reflects ...
  2. Standard Error

    The standard deviation of the sampling distribution of a statistic. ...
  3. Statistical Significance

    A result that is not likely to occur randomly, but rather is ...
  4. Regression

    A statistical measure that attempts to determine the strength ...
  5. Heteroskedastic

    A measure in statistics that refers to the variance of errors ...
  6. Homoskedastic

    A statistics term indicating that the variance of the errors ...
RELATED FAQS
  1. How do researchers ensure that a simple random sample is an accurate representation ...

    Researchers employ several safeguards to ensure that a simple random sample accurately represents a larger population. They ... Read Full Answer >>
  2. How can a representative sample lead to sampling bias?

    A representative sample, like any other type of sample, by its very nature leads to a degree of sampling bias, or sampling ... Read Full Answer >>
  3. What percentage of the population do you need in a representative sample?

    Technically, a representative sample requires only whatever percentage of the statistical population is necessary to replicate ... Read Full Answer >>
  4. What are the advantages of using a simple random sample to study a larger population?

    Simple random sampling is a method used to cull a smaller sample size from a larger population and use it to research and ... Read Full Answer >>
  5. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  6. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
Related Articles
  1. Economics

    Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.
  2. Markets

    A Guide To Conference Board Indicators

    Learn to put the CB data sets to trading use. Each chapter takes you through one of the board's benchmark indicators or surveys, their significance and their applications.
  3. Economics

    What's a Centrally Planned Economy?

    A centrally planned economy is one where the government controls the country’s supply and demand of goods and services.
  4. Economics

    What are Barriers to Entry?

    A barrier to entry is any obstacle that restricts or impedes a company’s efforts to enter an industry.
  5. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P 500 Trust

    Find out more about the SPDR S&P 500 ETF Trust, the characteristics of the exchange traded fund and the suitability of investing in the fund.
  6. Mutual Funds & ETFs

    ETF Analysis: Energy Select Sector SPDR

    Find out more about the Energy Select Sector SPDR Fund, the top holdings of this exchange-traded fund and the characteristics of the fund.
  7. Investing News

    The Financial Singularity Will Destroy Your Return

    Given the current and future growth of financial technology, many believe algorithms will soon define what drives market outcomes. With a wealth of big data, algorithms would be able to create ...
  8. Economics

    Explaining the Liquidity Coverage Ratio

    The liquidity coverage ratio requires banks and other financial institutions to hold enough cash and liquid assets on hand to weather market stress.
  9. Fundamental Analysis

    Calculating Valuation

    Valuation is the process of determining what an asset is worth.
  10. Economics

    Will the Selloff in China Hurt the Global Economy?

    Though China is the world’s second largest economy, its volatility in the stock market is unlikely to have an impact on the global or Chinese economy.

You May Also Like

Hot Definitions
  1. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  2. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  3. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  4. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  5. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  6. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!