Title: Importance of Confidence Intervals | Insights Association
Headings: Importance of Confidence Intervals
Importance of Confidence Intervals
Market researchers: we need to do more.

Content: You are hoping that anyone reading that number will understand it came from a sample and make appropriate allowances for sampling error. But will they? The science of decision analysis suggests they will not. In fact one of the major challenges in decision analysis is getting decision makers to make a realistic assessment of the uncertainty of their data. The natural tendency is to estimate too narrow a range for confidence intervals. When we underestimate confidence intervals we increase our risk. The need for accurate confidence intervals has never been more important than it is today. Shrinking market research budgets have meant smaller samples – samples that are often further divided to provide information on segments. Smaller samples mean wider confidence intervals. It is not uncommon to see a confidence interval of +/- 5% on average shares in allocation studies – even with samples of 80 to 100 respondents.