2sampling Distribution of Mean

Sampling Distribution of
Arithmetic Mean
Dr. T. T. Kachwala
1
Sampling Distribution of Arithmetic Mean
If we select a number of independent random samples of

similar size from a given population and calculate some
statistical measures like Arithmetic Mean X for each sample,
we shall get a series of values of X which need not be the
same and most probably would vary from sample to sample.
According to Central Limit Theorem in statistics, if the

sample selected are random, independent and of a sufficiently
large size, then the sample means will form a distribution that
is approximately normal. Such a probability distribution of all
the possible Arithmetic means of the different samples is
referred by statisticians as Sampling distribution of the mean.
2
Concept of Standard Error
A normal distribution is characterised by µ (Mean) and 

(S.D). Conceptually, standard deviation measures the average
deviation of the variable 'X' from its A.M. µ (i.e. It measures
the spread of the distribution).
On similar lines, Sampling distribution of Arithmetic Mean is

characterised by μ X (mean of the sampling distribution of
Arithmetic means) and  X (standard deviation of the sampling
distribution of Arithmetic mean).
This standard deviation of the sampling distribution of mean  X

is referred by statisticians as Standard Error of the
Mean. 3
Concept of Standard Error
Standard Error of Mean measures the deviation of the sample

statisticX from the mean of sampling distributionμ X
i.e. it measures the spread of the sampling distribution of

mean.
A distribution of sample mean that is less spread out (that has

a small standard error) is a better estimator of the population
mean than a distribution of sample mean that has a wider
dispersion (i.e. larger standard error)
4
Relationship between the Population Distribution and the
Sampling Distribution of Arithmetic Mean
'' is the mean of the population distribution & '  ' is the
Standard Deviation of the population distribution. μ X is the
mean of the sampling distribution of the mean &  X is the
standard error of the Arithmetic Mean.
The following formula summarizes the relation:
μX μ
σX  σ
n
 infinite population size n N  0.05
σ 
X
σ
n

N-n
N -1
 finite population size n N  0.05
5
Graphical Relationship between the Population
Distribution and the Sampling Distribution of Arithmetic
Mean
The standard deviation of the sampling distribution of mean x

would be less than the standard deviation of the
individual items in the population as indicated graphically
below:
Sampling distribution of Mean
Population Distribution
6
Standardizing the Sample Mean
In normal distribution to convert random variable 'X' to

standard random variable 'z' we apply z - transformation;
X -μ
SNV  z 
σ
On similar lines, one can standardize the sample mean
X  μ x X -μ
z  
σX σX
Where, X is the Sample Mean

 is the Population Mean
 X is the Standard Error of Mean
7
Sampling from Non Normal Populations
Consider the following population distribution

(skewed distribution)
According to the central limit theorem in statistics, the sampling

distribution of Arithmetic Mean even for Non Normal
Distribution will tend to a Normal Distribution as the sample size
increases as indicated in the diagram in the next slide
8
Sampling from Non Normal Populations
μx
μX μ
σ 
σ
X
n
Statisticians use the normal distribution as an
approximation to the sampling distribution
whenever the sample size is at least '30'.
9
Significance of the Central limit theorem
The significance of the central limit theorem is that it

permits us to use sample statistics to make inferences
about population parameters without knowing anything
about the shape of the population distribution.
The central limit theorem is one of the most powerful
concepts in statistics. What it really says is that the
distribution of sample means tends to be normally
distributed regardless of the shape of the population
distribution from which samples were taken.
10
Relationship between Sample Size and Standard Error
Standard error  X is a measure of dispersion of the sample

means around the population mean.
If the dispersion decreases (if  X becomes smaller) then

the values taken by the sample mean tend to cluster more
closely around .
Conversely, if the dispersion increases (if  X becomes

larger), the values taken by the sample mean tend to
cluster less closely around ''.
11
Concept of “Diminishing Return in Sampling"
Because  X varies inversely with n , there is a diminishing

return in sampling".
It is true that sampling more items will decrease the

standard error, but this "benefit" may not be worth the
"cost"
That is why, smart managers focus on the concept of the

'right' sample size i.e. the sample size which is a good
balance between both the cost and the worth of the
precision desired.
12
Thanks and Good Luck
Have a nice Day

Dr. T. T. Kachwala
13

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Sampling Distribution of

If we select a number of independent random samples of

According to Central Limit Theorem in statistics, if the

A normal distribution is characterised by µ (Mean) and 

On similar lines, Sampling distribution of Arithmetic Mean is

This standard deviation of the sampling distribution of mean  X

Standard Error of Mean measures the deviation of the sample

i.e. it measures the spread of the sampling distribution of

A distribution of sample mean that is less spread out (that has

The standard deviation of the sampling distribution of mean x

Sampling distribution of Mean

In normal distribution to convert random variable 'X' to

Where, X is the Sample Mean

Consider the following population distribution

According to the central limit theorem in statistics, the sampling

The significance of the central limit theorem is that it

Standard error  X is a measure of dispersion of the sample

If the dispersion decreases (if  X becomes smaller) then

Conversely, if the dispersion increases (if  X becomes

Because  X varies inversely with n , there is a diminishing

It is true that sampling more items will decrease the

That is why, smart managers focus on the concept of the

Have a nice Day

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