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)

SearchCompliance

  • compliance risk

    Compliance risk is an organization's potential exposure to legal penalties, financial forfeiture and material loss, resulting ...

  • information governance

    Information governance is a holistic approach to managing corporate information by implementing processes, roles, controls and ...

  • enterprise document management (EDM)

    Enterprise document management (EDM) is a strategy for overseeing an organization's paper and electronic documents so they can be...

SearchSecurity

  • denial-of-service attack

    A denial-of-service (DoS) attack is a security event that occurs when an attacker makes it impossible for legitimate users to ...

  • information security (infosec)

    Information security, often shortened to infosec, is the practice, policies and principles to protect data and other kinds of ...

  • user authentication

    User authentication verifies the identity of a user attempting to gain access to a network or computing resource by authorizing a...

SearchHealthIT

SearchDisasterRecovery

  • risk mitigation

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

SearchStorage

  • cloud storage

    Cloud storage is a service model in which data is transmitted and stored on remote storage systems, where it is maintained, ...

  • cloud testing

    Cloud testing is the process of using the cloud computing resources of a third-party service provider to test software ...

  • storage virtualization

    Storage virtualization is the pooling of physical storage from multiple storage devices into what appears to be a single storage ...

Close