Statistics for Business

TOPIC 05: SAMPLING, SAMPLING DISTRIBUTIONS,

and INTERVAL ESTIMATION
 TOPIC 05 – A
SAMPLING
&
SAMPLING DISTRIBUTIONS
OUTLINE

▪ Introduction to sampling problem

▪ Point estimation
▪ Introduction to sampling distribution
▪ Sampling distribution of sample mean
▪ Sampling distribution of sample proportion
▪ Other sampling methods

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INTRODUCTION to SAMPLING
PROBLEM

▪ A Population is the set of all the elements of

interest in a study.

▪ A Sample is a subset of the population.

▪ The Purpose of Statistical Inference is to obtain

information about population from information
contained in a sample.

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INTRODUCTION to SAMPLING
PROBLEM
Descriptive statistics:
Random Sampling - Collecting
- Presenting
- Describing
Population N (Size)
Sample (n)
 (Mean)
 (Standard Deviation) x
s
p (Proportion)
p

Inferential statistics:
•Estimating - Drawing conclusions
•Hypothesis testing - Making decisions
Based on sample data 5
INTRODUCTION to SAMPLING
PROBLEM

▪ Sample Statistic(s): A sample characteristic, such as

a sample mean x , a sample standard deviation s, a

sample proportion P̂ . The value of the sample

statistic is used to estimate the value of the

population parameter.

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INTRODUCTION TO SAMPLING
DISTRIBUTION
▪ The probability distribution of any particular sample statistic
is called the sampling distribution of statistic.
▪ The probability distribution of x is called sampling
distribution of x . Knowledge of this sampling distribution
and its properties will enable us to make probability
statements about how close the sample mean x to the
population mean .
▪ In practice, we select only one simple random sample from
population.

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Developing a sampling distribution

▪ Assume there is a population …

C D
▪ Population size N=4 A B

▪ Random variable, X,
is age of individuals
▪ Values of X:
18, 20, 22, 24 (years)

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 Developing a sampling distribution

▪ Summary Measures for the Population Distribution:

μ=
 X i
N
18 + 20 + 22 + 24
= = 21
4

σ=
 i
(X − μ) 2

= 2.236
N

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 Developing a sampling distribution
Now consider all possible samples of size n = 2

1st 2nd Observation

16 Sample
Obs 18 20 22 24 Means
18 18,18 18,20 18,22 18,24
1st 2nd Observation
20 20,18 20,20 20,22 20,24 Obs 18 20 22 24
22 22,18 22,20 22,22 22,24 18 18 19 20 21
24 24,18 24,20 24,22 24,24 20 19 20 21 22
22 20 21 22 23
16 possible samples
(sampling with 24 21 22 23 24
replacement)
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Developing a sampling distribution

Sampling Distribution of All Sample Means

16 Sample Means Sample Means

Distribution
1st 2nd Observation _
Obs 18 20 22 24 P(X)
.3
18 18 19 20 21
.2
20 19 20 21 22
.1
22 20 21 22 23
0 _
24 21 22 23 24 18 19 20 21 22 23 24
X
11
(no longer uniform)
Developing a sampling distribution

Summary Measures of this Sampling Distribution:

E(X) =
 X i
=
18 + 19 + 21+  + 24
= 21 = μ
N 16

σX =
 ( X i − μ) 2

N
(18 - 21)2 + (19 - 21)2 +  + (24 - 21)2
= = 1.58
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 Comparing the Population with its
Sampling Distribution
Population Sample Means Distribution

N=4 n=2

μ = 21 σ = 2.236 μX = 21 σ X = 1.58
_
P(X) P(X)
.3 .3

.2 .2

.1 .1

0
X
0 _
18 20 22 24 18 19 20 21 22 23 24
X
A B C D
SAMPLING DISTRIBUTION OF x

▪ Sampling Distribution of x
• The sampling distribution of x is the probability
distribution of all possible values of the sample mean x
▪ Expected Value of x
E( x ) = 

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SAMPLING DISTRIBUTION OF x

Population A simple random sample of

mean µ = ? n items is selected from the
population

The value of x is used The summary of the sample

to make inferences data provides a value for the
about the value of µ sample mean x

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SAMPLING DISTRIBUTION OF x
▪ Standard Deviation of x

• Infinite population or N is unknown  X =
n
• Standard Error is standard deviation of a point estimate.

•  x is referred to as the standard error of the mean.

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SAMPLING DISTRIBUTION OF x
▪ Distribution of x
• Question: What is Probability Distribution of x?
▪ If a population is normal with mean μ and standard
deviation σ, the sampling distribution of x is also
normally distributed with

σ
μX = μ σX =
n
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SAMPLING DISTRIBUTION OF x
▪ What if the population is not normal?
▪ Central Limit Theorem is applied:
The sampling distribution of sample mean X can be
approximated by a normal distribution as the sample
size n become large

X ~ any distribution
(Population distribution X  N (, 2/n)
is unknown)
Sample size is large
(n>30; textbook = 25)
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Z value for sampling distribution of x

▪ X  N (, 2/n) Z  N (0,12)

where
x−
Z=
/ n
where: X = sample mean
μ = population mean
σ = population standard deviation
n = sample size

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Finite Population Correction

▪ Apply the Finite Population Correction if:

• a population member cannot be included more than
once in a sample (sampling is without replacement), and
• the sample is large relative to the population
(n is greater than about 5% of N)
▪ Then

or
σ N−n
2
σ N−n
Var(X) = σX =
n N −1 n N −1

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Finite Population Correction

▪ If the sample size n is not small compared to the population

size N , then use

( X − μ)
Z=
σ N−n
n N −1

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Example

▪ Suppose a population has mean μ = 8 and standard

deviation σ = 3. Suppose a random sample of size n
= 36 is selected.

▪ What is the probability that the sample mean is

between 7.8 and 8.2?

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OUTLINE

▪ Introduction to sampling problem

▪ Point estimation
▪ Introduction to sampling distribution
▪ Sampling distribution of sample mean
▪ Sampling distribution of sample proportion
▪ Other sampling methods

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SAMPLING DISTRIBUTION OF P̂

▪ Sampling Distribution of P̂
• The sampling distribution of P̂ is the probability
distribution of all possible values of the sample
proportion P̂.
▪ Expected value of P̂
E( P̂ ) = p

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SAMPLING DISTRIBUTION OF P̂

Population A simple random sample of

with n items is selected from the
proportion p population
=?

The value of P̂ is used The summary of the sample

to make inferences data provides a value for the
about the value of p sample proportion P̂

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SAMPLING DISTRIBUTION OF P̂

▪ Standard Deviation of P̂
• Infinite population:  p =
p(1 − p)
n
p(1 − p) N − n
• Finite population: p =
n N −1

▪ Finite population correction factor N−n

N −1

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SAMPLING DISTRIBUTION OF P̂

▪ Form of the Sampling Distribution of P̂

• The sampling distribution of P̂ can be approximated by a
normal probability distribution whenever the sample
size (n) is large or: np(1 – p)  9

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Z-Value for Proportions

▪ Standardize P̂ to a Z value with the formula:

Pˆ − P Pˆ − P
Z= =
σ Pˆ P(1 − P)
n

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Example

If the true proportion of voters who support

Proposition A is P = .4, what is the probability that a
sample of size 200 yields a sample proportion
between .40 and .45?

P=
n=
Find P(0.40   0.45) = ?

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OTHER SAMPLING METHODS

▪ Stratified simple random sampling

• A probability sampling method in which the population
is first divided into strata and a simple random sample is
then taken from each stratum.

Population

Stratum 1 Stratum 2 Stratum H

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OTHER SAMPLING METHODS

▪ Cluster Sampling
• A probability sampling method in which the population
is first divided into clusters and then one or more
clusters is selected by sampling

Population

Cluster 1 Cluster 2 Cluster K

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OTHER SAMPLING METHODS

▪ Systematic Sampling
• A probability sampling method in which we randomly
select one of the first k elements and select every kth
element thereafter.
▪ Convenience Sampling
• A non-probability method of sampling whereby
elements are selected for the sample on the basis of
convenience.

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