Chapter 7 The Central Limit Theorem

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DEFINITION

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 SAMPLING DISTRIBUTION

The sampling distribution of a sample statistic calculated from a

sample of n measurements is the probability distribution of the
statistic.
 Population Distribution
x 1 2 3 4
POPULATION CHARACTERISTICS
P(x) 1/4 1/4 1/4 1/4

P(x)
.3
.2
.1
.0 x
1 2 3 4
1 1 1 1
𝜇 = σ 𝑥𝑝 𝑥 = 1( ) + 2( )+3( )+4( )=2.5
4 4 4 4

1 1 1 1
𝜎 2 = ෍ 𝑥 2 𝑝 𝑥 − 𝜇2 = 12 + 22 + 32 + 42 − 2.52 = 1.25
4 4 4 4
 ALL POSSIBLE SAMPLES
OF SIZE N = 2

16 Samples 16 Sample Means

1st 2nd Observation 𝑥ҧ 2nd Observation
Obs 1 2 3 4 1st 1 2 3 4
1 1,1 1,2 1,3 1,4 1 1.0 1.5 2.0 2.5
2 2,1 2,2 2,3 2,4 2 1.5 2.0 2.5 3.0
3 3,1 3,2 3,3 3,4 3 2.0 2.5 3.0 3.5
4 4,1 4,2 4,3 4,4 4 2.5 3.0 3.5 4.0
𝟏 𝟏 𝟏 𝟏 𝟏 𝟏
𝑷 𝟏, 𝟏 = × = , ⋯, 𝑷 𝟒, 𝟒 = × =
𝟒 𝟒 𝟏𝟔 𝟒 𝟒 𝟏𝟔
 ന
𝒙 1 1.5 2 2.5 3 3.5 4
𝑃(𝑥)ҧ 1/16 2/16 3/16 4/16 3/16 2/16 1/16

1 2 1
𝜇𝑥ҧ = ෍ 𝑥𝑝
ҧ 𝑥ҧ = 1 + 1.5 + ⋯+ 4 = 2.5, 𝜎𝑥2ҧ = 0.625
16 16 16

16 Sample Means Sampling Distribution

2nd Observation of the Sample Mean
𝑥ҧ
1st 1 2 3 4
1 1.0 1.5 2.0 2.5 P(x)
.3
2 1.5 2.0 2.5 3.0 .2
.1
3 2.0 2.5 3.0 3.5 .0 x
1.0 1.5 2.0 2.5 3.0 3.5 4.0
4 2.5 3.0 3.5 4.0
 COMPARISON

Population Sampling Distribution

P(x) P(x)
.3 .3
.2 .2
.1 .1
.0 x
.0 x
1 2 3 4 1.0 1.5 2.0 2.5 3.0 3.5 4.0

2 𝜎2 𝜎
𝜇𝑥ҧ = 𝜇, 𝜎𝑥ҧ = 𝜎𝑥ҧ =
𝑛 𝑛
X~U(150,200)

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FIGURE 6.5 HISTOGRAMS FOR SAMPLE
MEAN AND SAMPLE MEDIAN

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 PROPERTIES OF SAMPLING
DISTRIBUTIONS: UNBIASEDNESS
AND MINIMUM VARIANCE

𝑥ҧ is a point estimator of µ
Ƹ ′ ) is a point estimator of p
𝑝(𝑝

𝑠2 is a point estimator of 𝜎 2

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DISTRIBUTIONS OF
UNBIASED AND BIAS
ESTIMATORS

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SAMPLING DISTRIBUTIONS FOR
TWO UNBIASED
ESTIMATORS(MINIMUM
VARIANCE)
EXAMPLE
Probability Distribution

x 0 2 3
1 1 1
p(x)
3 3 3

 = 1.667  2 = 1.556
= 1.247

 EXAMPLE

Sampling Distribution of x for n = 2

3 5
x 0 1 2 3
2 2
p(x) 1/9 2/9 2/9 1/9 2/9 1/9

E(x ) = 1.667 is the same as .

x is an unbiased estimator of .
x is the minimum-variance unbiased estimator
(MVUE) of 
p̂ is the MVUE of p
7.1 THE CENTRAL LIMIT
THEOREM FOR SAMPLE MEANS
(AVERAGES)

Suppose X is a random variable with a distribution that may be known

or unknown (it can be any distribution). Using a subscript that matches
the random variable, suppose:
• a. μX = µ = the mean of X
• b. σX = σ = the standard deviation of X
• If you draw random samples of size n, then as n increases, the
random variable X which consists of sample means, tends to be
normally distributed and

𝑥ҧ ~ 𝑁(𝜇𝑥ҧ , 𝜎𝑥ҧ )
𝜎 𝜎
~𝑁 𝜇𝑥 , 𝑥 ~ 𝑁(𝜇, )
𝑛 𝑛

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THE CENTRAL LIMIT THEOREM

The central limit theorem for sample means says that if you keep
drawing larger and larger samples (such as rolling one, two, five, and
finally, ten dice) and calculating their means, the sample means form
their own normal distribution (the sampling distribution). The normal
distribution has the same mean as the original distribution and a
variance that equals the original variance divided by, the sample size.
2 𝜎2 𝜎
𝜇𝑥ҧ = 𝜇, 𝜎𝑥ҧ = 𝜎𝑥ҧ =
𝑛 𝑛

To put it more formally, if you draw random samples of size n, the

distribution of the random variable 𝑥,ҧ which consists of sample means,
is called the sampling distribution of the mean. The sampling
distribution of the mean approaches a normal distribution as n, the
sample size, increases (𝑛 ≥ 30).

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DEFINITION

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Copyright © 2017, 2013, 2009, 2006 Pearson Education,
Inc.. All rights reserved.
 THINKING CHALLENGE
You’re an operations analyst for AT&T. Long-
distance telephone calls are normally distributed
with  = 8 min. and  = 2 min. If you select
random samples of 25 calls, what percentage of
the sample means would be between 7.8 & 8.2
minutes?
2
ത
X~N(8,2), 𝑋~𝑁 8,
25
𝑃 7.8 < 𝑥ҧ < 8.2
= 𝑃 𝑥ҧ < 8.2 − 𝑃(𝑥ҧ < 7.8)
=pnorm(8.2,8,0.4)-pnorm(7.8,8,0.4)
=0.6914625-0.3085375
=0.382925
7.8−8 8.2−8
Or 𝑃 7.8 < 𝑥ҧ < 8.2 = 𝑃 0.4
<𝑍<
0.4
= 𝑃 −0.5 < 𝑍 < 0.5 = 2𝑃 0 < 𝑍 < 0.5
= 2 0.1915 = 0.3830

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EXAMPLE 7.3

e. Find the 95th percentile for a random sample (assume normal distribution).

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a. Since the sample mean tends to target the population mean, we have 𝜇𝑥ҧ = μ = 34. The
sample standard
𝜎 15
deviation is given by 𝜎𝑥ҧ = = = 1.5
𝑛 100
b. The central limit theorem states that for large sample sizes(n =100 > 30), the sampling
distribution will be approximately normal.
c. The probability that the sample mean age is more than 30 is given by
𝑃 𝑥ҧ > 30 = 1 − 𝑃 𝑥ҧ < 30 = 1 − 𝑝𝑛𝑜𝑟𝑚 30,34,1.5
=1-0.003830381 = 0.9961696
30−34
Or 𝑃 𝑥ҧ > 30 = 𝑃 𝑍 > 1.5
= 𝑃 𝑍 > −2.67 = 𝑃 −2.67 < 𝑍 < 0 + 0.5 = 0.4962 + 0.5 =
0.9962

d. The 95th percentile of sample mean

qnorm(0.95,34,1.5)
36.46728
Or P(Z<z)=0.95—>P(0<Z<z)=0.45 z =1.645x= μ+z𝜎𝑥ҧ = 34 + 1.645 1.5 = 36.4675
e. Find the 95th percentile for a random sample
qnorm(0.95,34,15)
[1] 58.6728
Or 𝑥 = 𝜇 + 𝑧𝜎 = 34 + 1.645 15 = 58.675.

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 SAMPLE PROPORTION

Just as the sample mean is a good

estimator of the population mean, the
sample proportion—denoted
p̂ — is a good estimator of the
population proportion p. How good the
estimator p̂ is will depend on the
sampling distribution of the statistic.
This sampling distribution has properties
similar to those of the sampling
distribution of x.
Sampling Distribution of 𝑝Ƹ
1. Mean of the sampling distribution is equal to the true
binomial proportion, p; that is, E(𝑝)=p.
Ƹ Consequently,
𝑝Ƹ is an unbiased estimator of p.
2. Standard deviation of the sampling distribution is
equal to 𝑝𝑞/𝑛; that is, 𝜎𝑝ො = 𝑝𝑞/𝑛.
3. For large samples, the sampling distribution is
approximately normal.
(A sample is considered large if
𝑛𝑝Ƹ ≥ 15 𝑎𝑛𝑑 𝑛𝑞ෝ ≥ 15. 𝑤ℎ𝑒𝑟𝑒 𝑞ො = 1 − 𝑝.Ƹ )

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Consider a single random sample of 100 workers. If we define a
“success” as a worker in favor of unionization, and if 58 of the 100
are in favor of unionization, then our estimation of the binomial
proportion

p is p̂  58/100  .58
Assume that 60% of all workers at a large plant in favor of
unionization. In a random sample of 100 workers, what is
the probability that fewer than half are favor of unionization?
P=.60, np=100(.60)=60, n(1-p)=100(1-.6)=40
N is large
𝜎𝑝ො = 𝑝(1 − 𝑝)/𝑛 = (0.6)(0.4)/100 = 0.049
𝑃 𝑝Ƹ < 0.5 = 𝑝𝑛𝑜𝑟𝑚 0.5,0.6,0.049 = 0.02063454
0.5−0.6
Or 𝑃 𝑝Ƹ < 0.5 = 𝑃 𝑧 < = 𝑃 𝑍 < −2.04 = 0.5 −
0.049
𝑃 −2.04 < 𝑍 < 0 = 0.5 − 0.4793 = 0.0207
7.2 THE CENTRAL LIMIT
THEOREM FOR SUMS

Suppose X is a random variable with a distribution that may be known

or unknown (it can be any distribution) and suppose:
• a. μX = µ = the mean of Χ
• b. σΧ = σ = the standard deviation of X
If you draw random samples of size n, then as n increases (𝑛 ≥ 30),
the random variable ΣX consisting of sums tends to be normally
distributed and

෍ 𝑋 = 𝑋1 + 𝑋2 + ⋯ + 𝑋𝑛

E(σ 𝑋) = E 𝑋1 + E 𝑋2 + ⋯ + E 𝑋𝑛 = µ + µ + ⋯ + µ = 𝑛 µ
𝜎σ2 𝑋 = 𝜎𝑥21 + 𝜎𝑥22 + ⋯ + 𝜎𝑥2𝑛 = 𝑛 𝜎 2
𝜎σ 𝑋 = 𝑛 𝜎
σ 𝑋 ~ 𝑁(𝑛 µ, 𝑛 𝜎)

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THE CENTRAL LIMIT THEOREM
FOR SUMS
The central limit theorem for sums says that if you keep drawing larger
and larger samples and taking their sums, the sums form their own normal
distribution (the sampling distribution), which approaches a normal
distribution as the sample size increases.
The normal distribution has a mean equal to the original mean
multiplied by the sample size and a standard deviation equal to the
original standard deviation multiplied by the square root of the
sample size.
The random variable ΣX has the following z-score associated with it:

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EXAMPLE 7.5

An unknown distribution has a mean of 90 and a standard deviation of

15. A sample of size 80 is drawn randomly from the population.
• a. Find the probability that the sum of the 80 values (or the total of
the 80 values) is more than 7,500.
• b. Find the sum that is 1.5 standard deviations above the mean of
the sums.

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SOLUTION 7.5
a. Let X = one value from the original unknown population. The
probability question asks you to find a probability for the sum (or total
of) 80 values (n > 30).
ΣX = the sum or total of 80 values. Since μ = 90, σ = 15, and n = 80,
ΣX ~ N((80)(90), ( 80 )(15))
𝑃 σ 𝑥 > 7500 = 1 − pnorm 7500,7200,136.1641 =1- 0.9862105
= 0.0137895
7500−7200
Or 𝑃 σ 𝑥 > 7500 = 𝑃 𝑍 > 136.1641 = 𝑃 𝑍 > 2.20 = 0.5 −
𝑃 0 < 𝑍 < 2.20 = 0.5 − 0.4861 = 0.0139
b. Find Σx where z = 1.5
σ 𝑋 − 7200
𝑧= → ෍ 𝑋 = 7200 + 1.5 136.1641 = 7401.246
136.1641

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