Browse Definitions :
Definition

rule of five (statistics)

The rule of five is a rule of thumb in statistics that estimates the median of a population by choosing a random sample of five from that population. It states that there is a 93.75% chance that the median value of a population is between the smallest and largest values in any random sample of five. This rule can be used to save data collection time in order to make a quicker business decision.

In a scenario where the mid-point or median of a population is required, the rule of five can be used to approximate it. In any population, half the individuals will be above the median and half below. Therefore, the likelihood of choosing a value above or below the median is 50% either way, equivalent to the flip of a coin.  The likelihood of flipping 100% tails or heads would be 1/32 or 3.125%. So the chance of not getting all heads or tails is 100 - (3.125 x 2), or 93.75. Thus, the probability of the median sample being between the lowest and highest samples in any random sampling of five is 93.25%.

The goal of the rule of five is to reduce uncertainty without wasting resources gathering every piece of data. Rather than survey an entire population, applying the rule of five involves selecting five random members as a representative sample of the population. The results themselves may be less accurate, but finding the overall precision of an entire group is usually unnecessary. The rule of five makes it possible to achieve an acceptable level of accuracy to enable faster a decision-making process and trend prediction.

The rule of five was conceived by Douglas Hubbard, the author of "How to Measure Anything: Finding the Value of Intangibles in Business" and an established expert in risk management, metrics and decision analysis. 

This was last updated in December 2018

Continue Reading About rule of five (statistics)

Networking
  • voice over LTE (VoLTE)

    Voice over LTE (VoLTE) is a digital packet technology that uses 4G LTE networks to route voice traffic and transmit data.

  • ONOS (Open Network Operating System)

    Open Network Operating System (ONOS) is an OS designed to help network service providers build carrier-grade software-defined ...

  • telematics

    Telematics is a term that combines the words telecommunications and informatics to describe the use of communications and IT to ...

Security
  • three-factor authentication (3FA)

    Three-factor authentication (3FA) is the use of identity-confirming credentials from three separate categories of authentication ...

  • cyber espionage

    Cyber espionage (cyberespionage) is a type of cyber attack that malicious hackers carry out against a business or government ...

  • role-based access control (RBAC)

    Role-based access control (RBAC) is a method of restricting network access based on the roles of individual users within an ...

CIO
  • project charter

    A project charter is a formal short document that states a project exists and provides project managers with written authority to...

  • leadership

    Leadership is the ability of an individual or a group of people to influence and guide followers or members of an organization, ...

  • transaction

    In computing, a transaction is a set of related tasks treated as a single action.

HRSoftware
  • employee engagement

    Employee engagement is the emotional and professional connection an employee feels toward their organization, colleagues and work.

  • talent pool

    A talent pool is a database of job candidates who have the potential to meet an organization's immediate and long-term needs.

  • diversity, equity and inclusion (DEI)

    Diversity, equity and inclusion is a term used to describe policies and programs that promote the representation and ...

Customer Experience
  • sales development representative (SDR)

    A sales development representative (SDR) is an individual who focuses on prospecting, moving and qualifying leads through the ...

  • service level indicator

    A service level indicator (SLI) is a metric that indicates what measure of performance a customer is receiving at a given time.

  • customer data platform (CDP)

    A customer data platform (CDP) is a type of software application that provides a unified platform of customer information that ...

Close