What level of theory should I use?
This whole site is directed at that question. The section on costs gives a
brief summary of cost vs accuracy.
See section V.1. Cost Comparison.
The semiemprical methods (such as AM1 and PM3) offer a quick calculation
and provide a good starting geometry for "higher" levels of theory.
Ideally one would systematically progress to levels of theory
with better treatments of electron correlation
(such as progressing from HF to MP2 to CCSD(T))
and also increasing the size of the basis set.
The property of interest should settle down to the "correct" value
as the calculation gets better.
In practice one cannot always afford a higher level of theory. This is where choosing a good reaction can help in obtaining accurate thermochemistry.
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