95% of data within \( \pm 2\sigma \), so 5% outside

Wed, 06 May 2026 17:42:26 +0000

Understanding the 95% Rule: Why 95% of Data Lies Within ±2σ and What It Means for Everyday Decision-Making When analyzing data, one of the most critical statistical principles is the normal distribution—a bell-shaped curve that shapes how we interpret variability. A fundamental rule is that 95% of data points fall within ±2 standard deviations (σ) from the mean, with only 5% lying beyond that range. But why does this matter, and how does it influence choices in business, science, and daily life? ### What Does It Mean for Data to Be Within ±2σ? In a perfectly normal distribution, the standard deviation quantifies spread: it tells us how much individual data points deviate from the average. When analysts say 95% of the data lies within ±2σ around the mean, they highlight two key insights: