The 95% and 99% Rules

Fundamentals of Social Statistics by Adam J. McKee

When studying normal distributions, some intriguing rules help us quickly understand where most of our data lies. Among these, the 95% Rule and the 99.7% Rule are particularly noteworthy. Let’s unpack these concepts and see how they play out in real-life scenarios.

Understanding the 95% Rule

The essence of the 95% Rule is this: in a bell-shaped (normal) distribution, about 95% of all values or scores lie within two standard deviations from the mean.

Imagine a scenario where students take a test with an average score (mean) of 100, and the spread of scores (standard deviation) is 10. If we go two standard deviations away from this average, we get a range from 80 to 120. This means that approximately 95% of the students scored between 80 and 120 on this test.

The Mathematics Behind the 95% Rule

While it’s convenient to think of two standard deviations covering 95% of the scores, if you’re aiming for precision, it’s slightly off. In a perfect normal distribution, you’d need to go out by 1.96 standard deviations from the mean to encompass 95% of the cases. Why this odd number? Well, that’s just how the math of the bell curve works. When we aim for precise statistical analysis, especially for formal reports, using 1.96 instead of 2 is the way to go.

For instance, let’s consider an IQ test with a mean of 100 and a standard deviation of 15. By multiplying the standard deviation by 1.96, we get 29.4. So, 95% of people taking this IQ test would score between 70.6 and 129.4.

The 99.7% Rule & Its Close Relative, the 99% Rule

Statistics provides fascinating insights into understanding data, and the 99.7% Rule is one such beacon. Within the confines of a normal distribution, often represented as the familiar bell curve, this rule postulates that a staggering 99.7% of all data points or scores lie within a range demarcated by three standard deviations from the mean. Picture a vast expanse of data; according to this rule, all but a tiny 0.3% of that expanse fits within this specific range. It emphasizes the power of the central tendency in a normally distributed dataset, with extreme outliers being quite the rarity.

The Nuanced 99% Rule

However, nuances exist even within the world of seemingly clear-cut rules. The 99% Rule provides a more focused lens. Instead of traversing three standard deviations from the mean, this rule dials it down slightly to 2.58 standard deviations. The rationale? To precisely capture 99% of the data, excluding the outlying 1%. This differentiation has its roots in the preference of researchers for round percentages, aiming for a balance between precision and comprehensibility.

Why These Distinctions Matter

The variance between the 99.7% Rule and the 99% Rule — specifically, the difference between 2.58 and 3.00 standard deviations — might appear inconsequential at first glance. But delve deeper, and its importance emerges. While the 95% Rule’s difference between 1.96 and 2.00 seems smaller, it only results in a 5% span of data. However, the leap from the 99% to the 99.7% Rule covers a more substantial 0.7% of data, which is quite significant considering it’s at the tails of the distribution where outliers reside. Outliers, by their very nature, have more profound effects on datasets, being the extreme values. Hence, the difference between 2.58 and 3.00 becomes especially relevant.

Furthermore, as we move further out on the tails of the bell curve, the data becomes sparser, and small shifts in standard deviations can encapsulate a larger percentage of the remaining data. That’s why, in the context of the normal distribution, the seemingly modest 0.42 deviation difference between 2.58 and 3.00 captures an additional 0.7% of data, while the 0.04 deviation difference between 1.96 and 2.00 encapsulates a much smaller percentage. It’s a testament to the intriguing characteristics of the bell curve and why, in the realm of statistics, every decimal can dramatically alter interpretations and conclusions.

Handy Multipliers for the Curious Minds

For those who frequently dive into statistical adventures, it’s useful to remember some multipliers for various percentages of data coverage:

  • 68%: Multiply by 1.00
  • 95% (approximate): Multiply by 2.00
  • 95% (precise): Multiply by 1.96
  • 99%: Multiply by 2.58
  • 99.7%: Multiply by 3.00

Knowing these multipliers helps in swiftly gauging where most of your data lies within a given standard deviation.

Final Thoughts

Understanding these rules provides a quick and efficient way to visualize where the bulk of our data is situated in a normal distribution. Whether you’re analyzing test scores, conducting research, or just curious about data trends, these rules are invaluable tools in the arsenal of every statistician and data enthusiast.

Key Terms

Normal Curve, Gaussian Distribution, Bell Curve, Symmetrical


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Last Modified:  10/16/2023

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