There are three different methods that one can utilize to measure percent body fat and they are: Hydrostatic Weighing, Bioelectrical Impedance and Skinfold Measurements.
Hydrostatic Weighing is considered the gold standard when it comes to finding out percent body fat for an individual. This method of testing percent body fat can be fairly accurate and it needs to be administered in an environment that is conducive for this type of measurement. The reason is because this test is going to take time, effort, patience and it will cost, so you want it done correctly because it is not a comfortable experience. Some of the drawbacks or cons of doing this type of test is that you have to be submerged in water, remain very still, expel all of your air out and hope they get a good reading. Sometimes you will feel like a piece of meat on a large scale, but underwater. A lot of individuals get very uncomfortable when they have to expel their air out because it gives them a sense of drowning.
When it comes to the amount of error associated with a type of testing method, this can be associated with the professional administering the test, the patience of the client, and most important, the amount of residual volume of air that is left in the lungs after expelling all of the air out (Rv). There will always be a certain amount of air left in the lungs even if you think you expelled all of your air out, and this is the main standard of error that will need to be calculated when coming up with percent body fat. A lot of the companies will hire those big dunk tank vans that park in front of the local gyms and they will do all of this calculation for you, but in a closed scientific setting (college/research), this will be done by a formula.
The second method that is gaining a lot of popularity is called, Bioelectrical Impedance. This type of method can be found in a lot of the new weight scales that you can buy that state you can measure your percent body fat. The theory is that when an electrical impulse is passed through lean tissue it should move at a faster rate and when it passes through tissue mainly composed of adipose or, fat it should go at a slower rate. A lot of these instruments can be hand held, you can stand on them, or they will put one electrode on your hand and one on your feet in order to get the whole body. Either way, this test is extremely fast and it does not require you to be submerged in water, like hydrostatic weighing.
The popularity of this method is that you can do a large amount of people within a short amount of time. For example, if you are doing a corporate wellness event, in a two hour time span you can probably do over a 100 tests (multiple machines), versus some other methods of testing body fat that requires more time.