Basic Business Statistics

(8th Edition)

Chapter 7
Sampling Distributions

2002 Prentice-Hall, Inc. Chap 7-1

 Chapter Topics

Sampling distribution of the mean

Sampling distribution of the proportion
Sampling from finite population

2002 Prentice-Hall, Inc. Chap 7-2

 Why Study
Sampling Distributions
Sample statistics are used to estimate
population parameters
e.g.: X 50 estimates the population mean

Problems: Different samples provide different

estimates
Large samples give better estimates; large sample
costs more
How good is the estimate?
Approach to solution: Theoretical basis is
sampling distribution
2002 Prentice-Hall, Inc. Chap 7-3
 Sampling Distribution

Theoretical probability distribution of a

sample statistic
Sample statistic is a random variable
Sample mean, sample proportion
Results from taking all possible
samples of the same size

2002 Prentice-Hall, Inc. Chap 7-4

 Developing Sampling
Distributions

Assume there is a population

Population size N=4 B C

Random variable, X,
is age of individuals
Values of X: 18, 20,
22, 24 measured in
D
years A

2002 Prentice-Hall, Inc. Chap 7-5

 Developing Sampling
Distributions
(continued)

Summary Measures for the Population Distribution

N

X i
P(X)
i 1 .3
N
.2
18 20 22 24
21 .1
4
N 0
X
2
i A B C D X
i 1
2.236 (18) (20) (22) (24)
N
Uniform Distribution
2002 Prentice-Hall, Inc. Chap 7-6
 Developing Sampling
Distributions
(continued)
All Possible Samples of Size n=2
1st 2nd Observation
Obs 18 20 22 24
16 Sample Means
18 18,18 18,20 18,22 18,24
20 20,18 20,20 20,22 20,24 1st 2nd Observation
22 22,18 22,20 22,22 22,24 Obs 18 20 22 24

24 24,18 24,20 24,22 24,24 18 18 19 20 21

20 19 20 21 22
16 Samples Taken
22 20 21 22 23
with Replacement
24 21 22 23 24
2002 Prentice-Hall, Inc. Chap 7-7
 Developing Sampling
Distributions
(continued)
Sampling Distribution of All Sample Means

16 Sample Means Sample Means

Distribution
1st 2nd Observation
P(X)
Obs 18 20 22 24
.3
18 18 19 20 21
.2
20 19 20 21 22
.1
22 20 21 22 23 _
0 X
24 21 22 23 24 18 19 20 21 22 23 24

2002 Prentice-Hall, Inc. Chap 7-8

 Developing Sampling
Distributions
(continued)

Summary Measures of Sampling Distribution

N

X i
18 19 19 24
X i 1
21
N 16
N

X X
2
i
X i 1

N
18 21 19 21 24 21
2 2 2

1.58
16
2002 Prentice-Hall, Inc. Chap 7-9
 Comparing the Population with
its Sampling Distribution
Population Sample Means Distribution
N=4 n=2
21 2.236 X 21 X 1.58
P(X) P(X)
.3 .3

.2 .2
.1 .1

0 0 _
A B C D X 18 19 20 21 22 23 24 X
(18) (20) (22) (24)

2002 Prentice-Hall, Inc. Chap 7-10

 Properties of Summary Measures

X
e.g.: X Is unbiased
Standard error (standard deviation) of the
sampling distribution X is less than the
standard error of other unbiased estimators

For sampling with replacement: X
As n increases, X decreases n

2002 Prentice-Hall, Inc. Chap 7-11

 Unbiasedness
P(X)
Unbiased Biased

X X
2002 Prentice-Hall, Inc. Chap 7-12
 Less Variability

P(X)
Sampling
Distribution
of Median Sampling
Distribution of
Mean

X
2002 Prentice-Hall, Inc. Chap 7-13
 Effect of Large Sample

Larger
P(X)
sample size

Smaller
sample size

X
2002 Prentice-Hall, Inc. Chap 7-14
 When the Population is Normal
Population Distribution
Central Tendency 10
X

Variation 50
Sampling Distributions
X
n n4 n 16
Sampling with X 5 X 2.5
Replacement
X 50 X
2002 Prentice-Hall, Inc. Chap 7-15
 When the Population
is Not Normal
Population Distribution
Central Tendency 10
X

Variation 50
Sampling Distributions
X
n n4 n 30
Sampling with X 5 X 1.8
Replacement
X 50 X
2002 Prentice-Hall, Inc. Chap 7-16
 Central Limit Theorem

As Sample Sampling
Size Gets Distribution
Large Becomes
Enough Almost
Normal
Regardless
of Shape of
Population

X
2002 Prentice-Hall, Inc. Chap 7-17
 How Large is Large Enough?

For most distributions, n>30

For fairly symmetric distributions, n>15
For normal distribution, the sampling
distribution of the mean is always normally
distributed

2002 Prentice-Hall, Inc. Chap 7-18

 Example: 8 =2 n 25
P 7.8 X 8.2 ?
7.8 8 X X 8.2 8
P 7.8 X 8.2 P
2 / 25 X 2 / 25
P .5 Z .5 .3830

Sampling Distribution Standardized

2 Normal Distribution
X .4 Z 1
25
.1915

7.8 8.2 X 0.5 0.5 Z

2002 Prentice-Hall, Inc.
X 8 Z 0 Chap 7-19
 Population Proportions p
Categorical variable
e.g.: Gender, voted for bush, college degree
Proportion of population that has a
characteristic p
Sample proportion provides an estimate
X number of successes
pS
n sample size
If two outcomes, X has a binomial distribution
Possess or do not possess characteristic
2002 Prentice-Hall, Inc. Chap 7-20
 Sampling Distribution
of Sample Proportion
Approximated by
normal distribution Sampling Distribution

np 5 P(ps)

n 1 p 5
.3
.2
.1
Mean: 0 ps
p p
S
0 .2 .4 .6 8 1

Standard error:

p 1 p p = population proportion
p
2002 Prentice-Hall, Inc.
S
n Chap 7-21
 Standardizing Sampling
Distribution of Proportion
pS pS pS p
Z
p S
p 1 p
n
Standardized
Sampling Distribution Normal Distribution

p S
Z 1

p S
pS Z 0 Z
2002 Prentice-Hall, Inc. Chap 7-22
 Example:
n 200 p .4 P pS .43 ?

p
.43 .4 P Z .87 .8078
P pS .43 P
S pS

pS .4 1 .4

200
Standardized
Sampling Distribution
Normal Distribution
p S
Z 1

p .43
S
pS 0 .87 Z
2002 Prentice-Hall, Inc. Chap 7-23
 Sampling from Finite Sample

Modify standard error if sample size (n) is

large relative to population size (N )
n .05N or n / N .05
Use finite population correction factor (FPC)
Standard error with FPC
N n
X
n N 1
p 1 p N n
P

2002 Prentice-Hall, Inc.

S
n N 1 Chap 7-24