What is Incidence Rate (IR) in Market Research?
Header Image by @corinnekutz via Unsplash
If you’ve ever had to work with a market research vendor, such as a panel provider, you may have heard the term “incidence rate” or “IR” get thrown around? But what does it mean, exactly, and when do you need it?
What is incidence rate?
Incidence rate, or IR in market research is a metric used to convey the size of a population. More specifically, it refers to the percentage of people within a population who meet the criteria for participation in a research study.
For example, let’s say you were planning to survey Canadians aged between 20 to 34 years old. To figure out the IR we will first need to acquire some demographic data. You can usually get this info from the census/stats bureau website for a given country (e.g. Statistics Canada). However, when it comes to age and gender breakdowns I find that Population Pyramid is a convenient source. I’ve gone ahead and pulled the latest age and gender distribution data for Canada.
Source: Population Pyramid
Now all we have to do is add up all of the percentages within the 20 to 34 age bracket, which gives us about 20%. And that’s it, 20% is our IR!
Put simply, IR is a measure of population size, and so the bigger the number, the higher the IR, the easier the population will be to study.
On the other hand, a lower IR means a smaller population, which also means a population that may be much more difficult to reach.
Let’s consider another example. Say you wanted to survey teachers in Canada. A quick Google search for “how many teachers in canada” led me to this table on the Statistics Canada website, which shows that as of the 2017 there were 323,058 full-time teachers in Canada. And this chart from Statista tells me that in the same year, there were approximately 14.7 million full-time workers in Canada. So using this information, we can estimate that the IR of full-time teachers is Canada is around 2% (323K / 14.7M).
Sure, the employment data I used above is a bit old, and this is a fairly rough calculation. But the IR I calculated still tells me everything that I need to know, which is that the IR of teachers is very small. Hence teachers will be a difficult group to study at scale.
IR is an important consideration in market research because it can affect the feasibility of the study. This means that a panel provider may only be feasible for a small number of samples, or they may not be feasible at all. So you shouldn’t expect to see large samples sizes, like n=1,000 or more, for low IR groups. Furthermore, a study with a low incidence rate will typically be more costly.
The table below provides an overview of some example groups/audiences commonly pegged to different tiers of IR. Note that this is meant to serve as a general guide, as actual IR will change by location (e.g. country, region, etc) and it can change over time.
Tiers of IR
How is IR used?
If you’re a research buyer and you’re reaching out to a market research vendor, such as a panel provider, you will typically need to share some key information about your research project for them to give you a quote. And one of the most important parts of your brief is the target audience. Hence, telling the vendor the estimated IR of your audience is very important. If you don’t know the IR, then simply describe the key conditions or behaviour of the target audience (e.g. must be female, between the ages 20 to 34 and have purchased a new phone in the past 1 year, etc). Once you do this, the vendor will typically be able to estimate the IR.
On the other hand, if you work at a market research firm, particularly one that does online quantitative research (i.e. surveys) then you can expect that your clients (at least the more seasoned ones) will usually mention IR in their brief.
And it’s as simple as that. Thanks again for reading and have a great day!
