A statistical analysis of the effect of measurement errors on the determination of small vector displacements of diffusely reflecting objects by holographic interferometry is reported. There are two sources of error: inaccurate measurement of fringe-order number and inaccurate measurement of illumination and observation directions. Standard deviations of errors in measured displacements due to these two sources are presented in graphical form for a variety of holographic system geometries. Absolute fringe orders should be measured whenever possible, because fringe readout by scanning leads to very large errors.