Stratified Random Sampling

AAA

DEFINITION of 'Stratified Random Sampling'

A method of sampling that involves the division of a population into smaller groups known as strata. In stratified random sampling, the strata are formed based on members' shared attributes or characteristics. A random sample from each stratum is taken in a number proportional to the stratum's size when compared to the population. These subsets of the strata are then pooled to form a random sample.

INVESTOPEDIA EXPLAINS 'Stratified Random Sampling'

The main advantage with stratified sampling is how it captures key population characteristics in the sample. Similar to a weighted average, this method of sampling produces characteristics in the sample that are proportional to the overall population. Stratified sampling works well for populations with a variety of attributes, but is otherwise ineffective, as subgroups cannot be formed.

RELATED TERMS
  1. Representative Sample

    A subset of a statistical population that accurately reflects ...
  2. Durbin Watson Statistic

    A number that tests for autocorrelation in the residuals from ...
  3. Population

    The entire pool from which a statistical sample is drawn. The ...
  4. Weighted Average

    An average in which each quantity to be averaged is assigned ...
  5. Attribute Bias

    The tendency of stocks selected by a quantitative technique or ...
  6. Sampling Error

    A statistical error to which an analyst exposes a model simply ...
Related Articles
  1. The Uses And Limits Of Volatility
    Markets

    The Uses And Limits Of Volatility

  2. Find The Highest Returns With The Sharpe ...
    Bonds & Fixed Income

    Find The Highest Returns With The Sharpe ...

  3. An Introduction To Value at Risk (VAR)
    Options & Futures

    An Introduction To Value at Risk (VAR)

  4. How To Convert Value At Risk To Different ...
    Active Trading Fundamentals

    How To Convert Value At Risk To Different ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center