Sample Size Determination
How to Determine Sample Size:
Sample size is the number of people or subjects that are used as a sample
in market research. It differs from the number of samples - the latter
means the number of times that you take a sample from the population.
So, if you take a sample three times in one research study, with each
sample size being 25 people, your total sample size would be 75 people.
How to find sample size?
There are many methods that researchers use to find the right sample size,
but all of them can be boiled down into the following four steps:
Step 1 Find out the size of the population
The first step you’ll need to take is to find out exactly the number of people
that comprises your population. For example, if your target population is
men between the ages of 20-30, living in Singapore as citizens or
permanent residents, you’ll need to use data from SingStat as your
reference. From there, you can start calculating your sample size through
several statistical methods, which we’ll discuss further below.
Nevertheless, there is a quick rule of thumb that you could use to
determine sample size based on the size of the population. Here’s a table
that GMO Research has prepared for you, based on our in-house
technique:
Population size Estimated sample size
100 80
1,000 279
10,000 370
100,000 383
1,000,000 384
> 1,000,000 384
Step 2 Determine the margin of error
Now, if you’re interested in calculating your own sample size, there are two
important statistical concepts that you’ll need to know: margin of error and
confidence level. These two concepts are integral in determining sample
size.
The margin of error, which we’re covering in this step, is basically
measuring this: “How far does the survey result deviate from the actual
population?"
What this means is this: If we use 1,000 people as the sample size to
represent a population of 10,000,000 people, how dissimilar is the sample’s
response to the population?
A good margin of error for market research is around 1-10%. The higher the
percentage, the more the sample’s response does not resemble the
population.
You’ll have to determine the margin of error that suffices for your market
research study. Generally, we recommend no more than a 5% margin of
error.
Step 3 Set confidence level
Confidence level refers to the probability that the sampling result is within
the margin of error. A good confidence level ranges between 90-99%, but a
market research study usually uses a 95% confidence level.
Here’s how confidence level works in practice: A 99% confidence level for a
sample means that you are 99% certain that the response of your sample
is reliable enough to describe the target population.
Step 4 Use a formula to find sample size
Now that you understand the concept of margin of error and confidence
level, you can easily calculate sample size through this formula:
• n = Sample size
• λ = Value based on confidence level
• p = Sample proportion
• d = Margin of error
There are two concepts we haven’t covered previously - the λ and p. These
two are determined through statistical rules and conventions used in
research studies.
For, λ (lambda), the numerical values are predetermined for each
confidence level, and the frequently used ones are as follows.
Confidence level Value of λ
90% 1.65
95% 1.96
99% 2.58
Sample proportion (p) is determined by the previous research study since
it calculates the ratio of the survey subjects who chose the relevant
response.
Typically, you can set the sample proportion value at "50% (0.5 in the
formula)" if you don’t have the data from previous research or pilot study.
Sample size calculation example
As an example, let's calculate the sample size under the following
conditions.
• Margin of error: 4% (0.04)
• Confidence level: 99%
• Lambda: 2.58
• Sample proportion: 50% (0.5)
From this formula, we can see that the sample size would be 1,040 people
or subjects.
