Sampling Distributions and Confidence Intervals for the Mean

POINT ESTIMATION OF A POPULATION OR PROCESS PARAMETER

Defn: A parameter is a summary value for a population or process. Defn: A sample statistic is a summary value for a sample. To use a sample statistic as an estimator of a parameter, the sample must be a random sample from a population or a rational group from the a process. Eg The mean and standard deviation of a population of measurements are population parameters. The mean and standard deviation of a sample of measurements are sample statistics

Defn: A point estimator is the numeric value of a sample statistic that is used to estimate the value of a population or process parameter.

Note: An estimator should be unbiased.

Defn: An unbiased estimator is a sample statistic whose expected value is equal to the parameter being estimated.

Elimination of systematic bias is assured when the sample statistic is for a random sample.

Table for frequently used point estimators of population parameters.

Population parameter

Estimator

Mean, Variance, 2 Standard deviation,

THE CONCEPT OF A SAMPLING DISTRIBUTION Dfn: A population distribution is the distribution of all the individual measurements in a population. Dfn: Sample distribution is the distribution of the individual values included in a sample A sample statistic varies in value from sample to sample because of random sampling variability, or sampling error.

Thus why any sample statistic is regarded as a variable whose distribution of values is represented by a sampling distribution.

SAMPLING DISTRIBUTION OF THE MEAN

The sampling distribution of the mean is described by determining the mean of such a distribution, which is the expected value (), and the standard deviation of the distribution of sample means ( ).
is usually called the error of the mean. When the population or process parameters are known, the expected value and standard error for the sampling distribution of the mean are: () = and =
.

Example

Suppose the mean of a very large population is = 50.0 and the standard deviation of the measurements is = 12. Determine the sampling distribution of the sample means for a sample size of = 36, in terms of the expected value and the standard error of the distribution.

Solution = = 50.0

= = 2.0

THE CENTRAL LIMIT THEOREM Theorem: As the sample size is increased, the sampling distribution of the mean (and for other samples as well) approaches the normal distribution in form, regardless of the form of the population distribution from which the sample was taken. ie, If is sufficiently large ( 30), then
2 ~(, )approximately.

Example: At the university, the mean age of the students is 22.3 years, and the standard deviation is 4 years. A random sample of 64 students is drawn. What is the probability that the average age of the students is greater than 23 years?

Example: An auditor takes a random sample of size = 36 from a population of 1000 accounts receivable . The mean value of the accounts receivable for the population is = $260.00, with the population standard deviation = 45.00. a) What is the probability that the sample mean will be less than $250.00?

b) What is the probability that the sample mean will be within $15.00 of the population mean?

CONFIDENCE INTERVALS FOR THE MEAN USING THE NORMAL DISTRIBUTION Dfn: A confidence interval for the mean is an estimate interval constructed with respect to the sample mean by which the likelihood that the interval includes the value of the population mean can be specified. The level of confidence associated with a confidence interval indicates the long-run percentage of the such intervals which would include the parameter being estimated.

When use of the normal probability distribution is warranted, the confidence interval for the mean is determined by

or when the population is not known, by

. Note: is the number of standard deviation units from the mean.

In particular, (for unknown )

is a 68% confidence interval for .

1.645 1.96

is a 90% confidence interval for .

is a 95% confidence interval for . is a 99% confidence interval for .

12.58

Example: For a given week, a random sample of 30 hourly employees selected from a very large number of employees in a manufacturing firm has a sample mean wage of = $180.00, with a sample standard deviation of = $14.00. Construct a 95% confidence interval for the mean wage for all hourly employees in the firm.

Solution: unknown , Therefore, 95% conf int. is given by 1.96

.

= 14, = 30
14 1.96 = 180 1.96 = ($174.98, $185.02) 30

Therefore, we can state that the mean wage level for all employees is between $174.98 and $185.02, with a 95% confidence in this estimate.

THE DISTRIBUTION AND CONFIDENCE INTERVALS FOR THE MEAN

The distribution is a family of distributions, with a somewhat different distribution associated with the degrees of freedom(df).
For a confidence interval for the population mean based on a sample of size n, df = n 1. For sample size n < 30.

The degrees of freedom indicate the number of values that are in fact free to vary in the sample that serves as the basis for the confidence interval

Where, df = n 1, the confidence interval for estimating the population mean when use of the t distribution is appropriate is
X t df sx .

Example: The mean operating life for a random sample of n = 10 light bulbs is X = 4000, with the sample standard deviation s = 200hr. The operating life of bulbs in general is assumed to be approximately normally distributed. Estimate the mean operating life for the population of bulbs from this sample using a 95 percent confidence interval.

Solution Since n=10<30,

95%Int. = X t df sx .
t df = t n1 = t 9 = 2.262 sx = s = 63.3. n

X = 4000

HYPOTHESIS TESTING CONCERNING THE VALUE OF THE POPULATION MEAN