Methods Of Determining Sample Size

There are six methods of determining sample size in market research

Unaided Judgment – When no specific method is used to determine sample size it is called unaided judgment. Such approach when used to arrive at sample size gives no explicit considerations to either the likely precision of the sample results or the cost of obtaining them (characteristics in which client should have interest). It is an approach to be avoided
All-You-Can-Afford – In this method, a budget for the project is set by some (generally unspecified) process and after the estimated fixed costs of designing the project, preparing a questionnaire (if required), analyzing the data & preparing the report are deducted, the remainder of the budget is allocated to sampling Dividing this remaining amount by the estimated cost per sampling gives the sample size

This method concentrates on the cost of the information and is not concerned about its value Although cost alwayshas to be considered in any systematic approach to sample size determination, one also needs to give consideration to how much the information provided by the sample will be worth. This approach produces sample sizes that are larger than required as well as sizes that are smaller than optimal

3. Required Size Per Cell – This methodof determining sample size can be housed onsimple random, stratified random, purposive and quota samples For example, In a study of attitudes with respect to fast food establishments in a local marketing area it was decided that information was desired for two occupational groups and for each of the four age groups This resulted in 2×4 =-8 sample cells. A sample size of 30 was needed per cell for the types of statistical analyses that were to be conducted. The overall sample size was therefore 8 x 30 = 240.

4 Use of Bayesian Statistical Model – The Bayesian model involves finding the difference between the expected value of the information to be provided by the sample size and cost of sample. This difference is known as expected net gain from sampling(ENG) the sample size with the largest positive ENG is chosen.

The procedure for finding the optimal value of ‘n’ or the size of sample under this approach is as under:

Find the expected value of the sample information(EVSI)for every possible n
Also workout reasonably approximated cost of taking a sample of every possible n,
Compare the EVSI and the cost of the sample for every possible n. In other words, workout the expected net gain (ENG) for every possible n as stated below:

For a given sample size (n): (EVSI) – (Cost of sample) = (ENG)

From above step the optimal sample size, that value of n,which maximizes the difference between theEVSI and the cost of the sample, can be determined

The computation of EVSI for every possible n and then comparing the same with the respective cost is often a very cumbersome task and is generally feasible with mechanized or computer help. Hence, this approach although being theoretically optimal is rarely used in practice.

5. Use of Traditional Statistical Model – The formula for traditional statistical model depends upon the type of sample to be taken and it always incorporates three common variables

à an estimate of the variance in the population from which the sample is tobe drawn

à the error from sampling that the researcher will allow

à the desired level of confidence that the actual sampling error will be within the allowable limits

The statistical models for simple random sampling include estimation of means and estimation of proportion