Statistics for Business and Economics

Ninth Edition, Global Edition

Chapter 6
Sampling and
Sampling
Distributions

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Chapter Goals
After completing this chapter, you should be able to:
• Describe a simple random sample and why sampling is
important
• Explain the difference between descriptive and inferential
statistics
• Define the concept of a sampling distribution
• Determine the mean and standard deviation for the
sampling distribution of the sample mean, X
• Describe the Central Limit Theorem and its importance
• Determine the mean and standard deviation for the
sampling distribution of the sample proportion, p̂
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Introduction
• Descriptive statistics
– Collecting, presenting, and describing data
• Inferential statistics
– Drawing conclusions and/or making decisions
concerning a population based only on sample
data

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Inferential Statistics (1 of 2)
• Making statements about a population by
examining sample results

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Inferential Statistics (2 of 2)
Drawing conclusions and/or making decisions
concerning a population based on sample results.
• Estimation
– e.g., Estimate the population
mean weight using the sample
mean weight
• Hypothesis Testing
– e.g., Use sample evidence to
test the claim that the
population mean weight is
120 pounds
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Section 6.1 Sampling from a
Population
• A Population is a complete set of all items or
individuals of a particular interest
– Examples: All likely voters in the next election
All parts produced today
All sales receipts for November

• A Sample is a subset of the population

– Examples: 100 voters selected at random for interview
A few parts selected for destructive testing
Random receipts selected for audit

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Population vs. Sample

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Why Sample?
• Less time consuming than a census
• Less costly to administer than a census
• It is possible to obtain statistical results of a
sufficiently high precision based on samples.

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Simple Random Sample
• Every object in the population has the same probability of
being selected
• Objects are selected independently
• Samples can be obtained from a table of random numbers
or computer random number generators

• A simple random sample is the ideal against which other

sampling methods are compared
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Sampling Distributions
• A sampling distribution is a probability
distribution of all of the possible values of a
statistic for a given size sample selected
from a population

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Developing a Sampling
Distribution (1 of 6)
• Assume there is a population …
• Population size N=4
• Random variable, X, is
age of individuals
• Values of X: 18, 20, 22,
24 (years)

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Developing a Sampling
Distribution (3 of 6)
Now consider all possible samples of size n = 2

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Developing a Sampling
Distribution (4 of 6)
Sampling Distribution of All Sample Means

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Chapter Outline

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Section 6.2 Sampling Distributions of
Sample Means

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Sample Mean
• Let X 1 , X 2 ,..., X n represent a random sample from a
population

• The sample mean value of these observations is defined as

1 n
X   Xi
n i 1

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Standard Error of the Mean
• Different samples of the same size from the same
population will yield different sample means
• A measure of the variability in the mean from sample to
sample is given by the Standard Error of the Mean:

X 
n
• Note that the standard error of the mean decreases as the
sample size increases

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Comparing the Population with Its
Sampling Distribution
Population Sample Means Distribution
N 4 n2
  21   2.236  X  21  X  1.58

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Developing a Sampling
Distribution (5 of 6)
Summary Measures for the Population Distribution:

 Xi

N
18  20  22  24
  21
4

( X i   ) 2
  2.236
N

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Developing a Sampling
Distribution (6 of 6)
Summary Measures of the Sampling Distribution:

 X i 18  19  21    24
E( X )    21  
N 16

( X i   ) 2
x 
N
(18  21) 2  (19  21) 2    (24  21) 2
  1.58
16
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If Sample Values Are Not Independent
• If the sample size n is not a small fraction of the population
size N, then individual sample members are not distributed
independently of one another
• Thus, observations are not selected independently
• A finite population correction is made to account for this:

2 N n  N n
Var ( X )  or  X 
n N 1 n N 1
( N  n)
The term is often called a finite population correction factor
( N  1)

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If the Population Is Normal
• If a population is normal with mean  and
standard deviation  , the sampling distribution of
X is also normally distributed with

 X   and  X 
n
• If the sample size n is not small relative to the population size N, then

 N n
 X   and  X 
n N 1

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Standard Normal Distribution for the
Sample Means
• Z-value for the sampling distribution of X :

X  X 
z 
X 
n
where: X  sample mean
  population mean
 X  standard error of the mean
Z is a standardized normal random variable with mean of 0 and a
variance of 1

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Sampling Distribution Properties (1 of 3)

E  X   

(i.e. X is unbiased)

(both distributions have the same mean)

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Sampling Distribution Properties (2 of 3)


X 
n

(i.e. X is unbiased)

(the distribution of X
has a reduced standard deviation)
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Sampling Distribution Properties (3 of 3)
As n increases,
 X decreases

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Central Limit Theorem (1 of 3)
• Even if the population is not normal,
• …sample means from the population will be
approximately normal as long as the sample size
is large enough.

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Central Limit Theorem (2 of 3)
• Let X 1 , X 2 ,..., X n be a set of n independent random
variables having identical distributions with mean
 , variance  2 , and X as the mean of these random
variables.
• As n becomes large, the central limit theorem states that
the distribution of

X  x
Z
X
approaches the standard normal distribution

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Central Limit Theorem (3 of 3)
As the sample size gets large enough…
the sampling distribution becomes almost normal
regardless of shape of population

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If the Population Is Not Normal
Sampling distribution
properties:
Central Tendency
X  
Variation

X 
n

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How Large Is Large Enough?
• For most distributions, n > 25 will give a sampling
distribution that is nearly normal
• For normal population distributions, the sampling
distribution of the mean is always normally
distributed

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Example 1 (1 of 3)
• Suppose a large population has mean   8 and
standard deviation   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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Example 1 (2 of 3)
Solution:
• Even if the population is not normally distributed,
the central limit theorem can be used (n > 25)
• … so the sampling distribution of X is
approximately normal
• … with mean  X  8
3 
• …and standard deviation  X    0.5
n 36

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Example 1 (3 of 3)
Solution: (continued):
 
 7.8  8    8.2  8 
P (7.8   x  8.2)  P   x  
 3  3 
 
 36 n 36 

 P(0.4  Z  0.4)  0.3108

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Acceptance Intervals
• Goal: determine a range within which sample means are
likely to occur, given a population mean and variance
– By the Central Limit Theorem, we know that the distribution of X
is approximately normal if n is large enough, with mean  and
standard deviation  X

– Let z be the z-value that leaves area in the upper tail of the
2
2
normal distribution (i.e., the interval  z to z encloses probability
1 ) 2 2

– Then
  z  X
2

is the interval that includes X with probability 1  

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Example 2 of Acceptance Interval

• The heights of 40 randomly chosen men were

measured, and it was found that the mean height
was 175cm, and the standard deviation of men's
heights was 20cm. Calculate the 95%
Confidence/Acceptance Interval within which
the true mean of ALL men (if we could measure all
their heights) is likely to be between?

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Answer
Number of observations n = 40
Mean,
Standard deviation

Decide what confidence/acceptance Confidence

Z
Interval
Interval we want:
80% 1.282
95% or 99% are common choices. Then find
85% 1.440
the "Z" value for that Confidence Interval
90% 1.645
95% 1.960
For 95% the Z value is 1.960
99% 2.576
99.5% 2.807
99.9% 3.291

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 Answer

The acceptance interval =   z  X

2

= 168.8cm to 181.2cm

our result says the true mean of ALL men (if we could
measure all their heights) is likely to be between
168.8cm and 181.2cm
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Section 6.3 Sampling Distributions of
Sample Proportions

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Sampling Distributions of Sample
Proportions
P = the proportion of the population having some
characteristic
• Sample proportion ( pˆ ) provides an estimate of P:
X number of items in the sample having the characteristic of interest
pˆ  
n sample size

• 0  pˆ  1
• p̂ has a binomial distribution, but can be approximated
by a normal distribution when nP (1  P )  5

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Sampling Distribution of p Hat
• Normal approximation:

P (1  P )
Properties: E ( pˆ )  P and  pˆ 
n
(where P = population proportion)

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Z-Value for Proportions
Standardize p̂ to a Z value with the formula:

pˆ  P pˆ  P
Z 
 pˆ P(1  P)
n

Where the distribution of Z is a good approximation

to the standard normal distribution if nP 1  P   5

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Example 3 (1 of 3)
• If the true proportion of voters who support
Proposition A is P = 0.4, what is the probability
that a sample of size 200 yields a sample
proportion between 0.40 and 0.45?

• i.e.: if P = 0.4 and n = 200, what is

P  0.40  pˆ  0.45  ?

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Example 3 (2 of 3)
• if P = 0.4 and n = 200, what is
P  0.40  pˆ  0.45  ?

P (1  P ) .4(1  .4)
Find  pˆ :  pˆ    .03464
n 200

Convert to  .40  .40 .45  .40 

standard
P (.40  pˆ  .45)  P  Z 
 .03464 .03464 
normal:
 P (0  Z  1.44)

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Example 3 (3 of 3)
• if P = 0.4 and n = 200, what is
P  0.40  pˆ  0.45  ?

Use standard normal table: P  0  Z  1.44   .4251

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Example 4
• It has been estimated that 43% of business
graduates believe that a course in business ethics
is very important for imparting ethical values to
students (David, Anderson, and Lawrimore 1990).
Find the probability that more than one-half of a
random sample of 80 business graduates have
this belief?

• i.e.: if P = 0.43 and n = 80, what is

^ >0.5 )
𝑃 (𝑝
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Answer

• P=0.43, n=80
• First we compute the standard deviation of the
sample proportion:

• Then the required probability can be computed as

follows:

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Chapter Summary

• Introduced sampling distributions

• Described the sampling distribution of sample means
– For normal populations
– Using the Central Limit Theorem

• Described the sampling distribution of sample proportions

• Calculated probabilities using sampling distributions

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