This is a development over cluster sampling which is carried out in multiple stages say, two, three or four stages. In the first place, the universe is divided into some clusters) from which certain clusters are selected at random as the first stage samples.
In the” second place, the selected first stage samples are again subdivided into some clusters from which again, certain clusters are selected at random as the second stage samples. In the third place, the selected second stage samples are again subdivided into some (dusters from which certain clusters are again selected at random as the third stage samples.
In this way the process of division and subdivision of the clusters and the selection of the multistage samples are carried out till the sample size is reduced to a reasonable extent. For example, in an urban enquiry, a sample of towns may be taken at first, then from each of the selected towns sub-sample of households may be selected and then if necessary, from each of the selected households a third stage sample of individuals may be taken.
Merits
(i) It is very flexible as compared to other methods of sampling.
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(ii) In this method, the subsequent stages of samples are needed only for a limited number of units i.e., for those only which were selected in the preceding stages. As such it saves a lot of time, energy and cost.
(iii) It leads to administrative efficiency by permitting the field work to be concentrated and yet covering a large area.
(iv) It is of great utility in surveys of undeveloped areas where no up to-date and accurate frame is available for subdivision of the materials into reasonably small sample units.
Demerits
It is likely to cause a large number of errors as it involves a process of divisions and sub-divisions of the various strata or clusters in different stages.
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It leads to greater variability of the estimates than any other method of sampling,
In general, it is less efficient than a suitable single stage random sampling.