User stories and their size are often the basis for planning a Sprint in Scrum. You can use a relative estimation and planning poker or a more classical approach to define the effort for each user stories. As such, they are also the basis for the metrics of progress and the velocity of the Scrum team.
In this blog post, Doug Brophy presents his opinion that the importance of large user stories in the backlog decrease the reliability of the team velocity (trend) and its usefulness for planning next iterations. The post discusses the “Cone of Uncertainty” (CoU) concept for software development projects that describes the exponentially decreasing uncertainty in project estimates as the project progresses.
As Scrum teams will often use something related to a Fibonacci suite to estimate the size of user stories, the larger number is attached to a user storie sizes, the wider error margin could exsist if we compare the estimate with its “real” size. The conclusion is that you should “break down your work into as small chunks as is practical. There are many benefits of working with small Agile user stories besides the reduced variability. These advantages include: increased focus, which helps prevent failure; earlier discovery / faster feedback; shorter lead time/ better throughput; and reduced testing overhead.”
The blog post is followed by an interesting discussion of this topic with the participation of George Dinwiddie and Mike Cottmeyer.
Read the full blog post on http://www.leadingagile.com/2014/01/small-stories-reduce-variability-velocity-improve-predictability/