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Sampling Distribution
1. Suppose the true proportion of females in the PGP 11-13 batch across all the IIMs is p=0.15.
Suppose you select all possible random samples of 30 students, each of those samples will yield a
value of the sample proportion (of females in that sample). If you construct a histogram of those
values, what you will get is precisely the sampling distribution of the sample proportion (of
females).
2. Suppose, each year the placement office of IIMK selects a random sample of 50 graduating
students and records the starting salary for each. Then it reports the sample mean of those 50
starting salaries. The distribution of these mean salaries will constitute the sampling distribution (of
the sample mean salaries of IIMK graduating students).
Sampling Distribution
E (x)
Standard Error of mean in case of infinite population
or sampling with replacement
s.e( x )
n
Population and Sample Proportions
x
Sample proportion: pˆ
n
As the sample size, n, increases such that the
sampling distribution of p approaches a Infinite Population
normal distribution with mean p and standard E ( pˆ ) p
deviation p(1 p)
n
p (1 p )
s.e.( pˆ )
n
Example
Suppose Indian corporate sector believes that about 45% of their senior executives have attended at
least one program (MDP, EPGP etc) offered by the IIMs at some point in their career. Suppose there
are about 1.2 lacs senior executives currently working in India. A research group in IIMK surveys a
random sample of 1000 senior executives regarding the above issue to verify that belief.
a) Find out population and sample proportions.
b) Find the standard error of the sample proportion of senior executives who have attended at least
one program in the IIMs.
c) If the research group selected 7000 senior executives, would the standard error remain the same as
above ?
d) Suppose 375 of the 1000 senior executives have attended a program in one of the IIMs. What will
be the estimated standard error of the sample proportion?
e) If the research group selected 7000 executives and 3000 of them admitted to have attended a
program in one of the IIMs, then what would be the new estimated standard error of the sample
proportion ?
Sampling from a Normal Population
X ~ N (, )
n
f(X)
0.2
Sampling Distribution: n = 2
centered on the population 0.1
Normal population
Normal population
mean, but becomes more 0.0
compactly distributed around
that population mean
Example
The foreman of a bottling plant has observed that the
amount of soda in each “32-ounce” bottle is actually a
normally distributed random variable, with a mean of 32.2
ounces and a standard deviation of .3 ounce.
X 32 32.2
P(X 32) P P( Z .67) 1 .2514 .7486
.3
Things we know:
2) = 32.2 oz.
3)
Example
If a customer buys a carton of four bottles, what is the probability that
the mean amount of the four bottles will be greater than 32 ounces?
“There is about a 91% chance the mean of the four bottles will exceed
32oz.”
mean=32.2
what is the probability that one bottle will what is the probability that the mean of
contain more than 32 ounces? four bottles will exceed 32 oz?
Central Limit Theorem (CLT)
If a random sample of size n is drawn from a
population with mean µ and standard deviation σ, the
distribution of the sample mean (x) approaches
normal distribution with mean µ and standard
deviation n as the sample size (n) increases.
2
, n
i.e. x ~ N
If the population is normal, the distribution of the
sample mean is normal regardless of sample size.
WHY CLT IS USEFUL
Population
n=2
n = 30
X X X X
NOTE
When the population has a normal distribution, the
sampling distribution of x is normally distributed
for any sample size.
LO 7.5
The Sampling Distribution
of the Sample Proportion
pp 0.46 0.43
P P 0.46 P Z
p 1 p
P Z
0.43 1 0.43
n 50
P Z 0.43 1 0.6664 0.3336
LO 7.5
Problem
1. Suppose out of all first year students enrolled in the top business schools across India, about 35% went
abroad for summer internship last year. Suppose you randomly select a business school and it turns out to be
IIMK which has about 360 students enrolled in the first year.
a) What is the probability that at least 30% of the 360 IIMK students will go abroad for internship this year ?
b) What is the probability that at most 50% of the 360 IIMK students will go abroad for internship this year ?
c) What is the probability that between 40% and 60% of the 360 IIMK students will go abroad for internship
this year ?
2. The sales of food and drink in Milma stall in IIMK vary from day to day. The daily sales figures fluctuate
with mean = Rs 500 and standard deviation = Rs 200. The stall owner wants to calculate the mean daily
sales for the week to check how he is doing.
a) What would the mean daily sale figures for the week center around ?
b) How much variability would you expect in the mean daily sales figures for the week ?
c) Suppose Milma stall owner now wants to look at the monthly sales. What will be the sampling
distribution ? Will his mean daily sales for the month vary more or less than the mean daily sales for the
week ?