Statistics for Business

STAT130
Unit 3: Sampling Distributions
Why Sampling Distributions?
 The basic thrust of inferential statistics is drawing
conclusions regarding the levels of populations
parameters.
 A statistic is computed from the sample and
varies from sample to sample.
 A statistic is a random variable and has a
probability distribution called the sampling
distribution.
 The probability distribution changes when the
population parameter changes, that is the
behavior of the sample statistic reflects the truth
about the population.
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Review
 Population mean: Sample Mean:

μ  x i x  x i

N n
where:
μ = Population mean
x = sample mean
xi = Values in the population or sample
N = Population size
n = sample size
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Developing a Sampling Distribution
 Assume there is a population …
 Population size N=4 D
A B C
 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:

  x i
P(x)
N .3
18  20  22  24
  21 .2
4
.1


0
(x  )2 x
 i
 2.236 18 20 22 24
N A B C D
Uniform Distribution
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 Developing a
Sampling Distribution
Now consider all possible samples of size n=2
1 st 2 nd Observation
Obs 18 20 22 24 16 Sample
18 18,18 18,20 18,22 18,24 Means
20 20,18 20,20 20,22 20,24 1st 2nd Observation
22 22,18 22,20 22,22 22,24 Obs 18 20 22 24

24 24,18 24,20 24,22 24,24 18 18 19 20 21

20 19 20 21 22
16 possible samples
(sampling with
22 20 21 22 23
replacement) 24 21 22 23 24
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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
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x
(no longer uniform)
Developing a Sampling Distribution
 Summary Measures of this Sampling Distribution:

x   x i

18 19  21…  24
 21
N 16

x 
 (x i  x ) 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 19 20 21 22 23 24
_
18 20 22 24 x
A B C D
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Exercise
 Given the following distribution:
x -2 0 2
p(x) .2 .6 .2

a) Find the mean and the standard deviation for

the population.
b) Find the sampling distribution of the sample
mean if samples of size 2 are drawn from this
population.
c) Find the sampling distribution of the sample
mean.
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Sampling Distribution of the Sample Mean
 The mean of the sampling distribution of the
sample mean is equal to the mean of the
population. That is
X  
 The standard deviation of the sampling
distribution of the sample mean is



X
n

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Shape of the sampling distribution
 The shape of the sampling distribution of the
sample mean relates to the following two
cases:
 The population from which samples are drawn
has a normal distribution
 That population does not have a normal
distribution
 Check the following experiment:
Demonstration

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 Sampling Distribution of
the Sample Mean
 Case 1: Sampling from normal population
 The sampling distribution of the sample mean
is normal whatever the value of n.
 Case 2: Sampling from non-normal
population (Central limit theorem (CLT)):
 For a large sample size, the sampling
distribution of the sample mean is
approximately normal, irrespective of the
shape of the population distribution.

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Effect of Sample Size
 The larger the sample
size, the more nearly
normally distributed
is the population of all
possible sample
means.
 Also, as the sample
size increases, the
spread of the
sampling distribution
decreases.

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How Large is Large Enough?
 A good rule-of-thumb is that “n is sufficiently
large” provided that “n≥30”.
 For fairly symmetric distributions, n > 15.
 It is understood that the approximation improves
as the sample size increases.
 For normal population distributions, the sampling
distribution of the mean is always normally
distributed.

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Sampling Distribution of X

 2
X is distributed as N  , 
 n 
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Example
 The scores of students on the ACT college
entrance examination in a recent year had the
normal distribution with mean =18.6 and
standard deviation  = 5.9. Take a SRS of 50
students who took the test. What is the
probability that the mean score of these 50
students is 21 or higher?
 5.9
 x  18.6 and  x    0.83
n 50

P( X  21)  PZ 
2118.6 
 P(Z  2.89)  0.0019
 0.83 
 In Excel, write =1-NORMDIST(21,18.6,0.83,1)
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Exercises
1. The length of time a battery lasts in a portable
CD player is normally distributed with a mean
of 240 minutes and a standard deviation of 15
minutes.
a) What is the probability that a selected battery will
last more than 250 minutes?
b) What is the probability that the mean time of 9
randomly selected batteries is more than 250
minutes?
c) What is the probability that the mean time of 36
randomly selected batteries is more than 250
minutes?
d) If the population of times is not normally distributed,
which, if any, of the questions above can you
answer? Justify your answer.
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Exercises
2. The amount of time spent by adults playing
sports per day is normally distributed with a
mean of 4 hours and standard deviation of 1.25
hours.
a) Find the probability that a randomly selected adult
plays sports for more than 5 hours per day
b) Find the probability that if four adults are randomly
selected, their average number of hours spent
playing sports is more than 5 hours per day.
c) Find the probability that if four adults are randomly
selected, all four play sports for more than 5 hours
per day.

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 Sampling Distribution of the Sample
Proportion
 Let p be the population proportion and p̂ be
the sample proportion.
 The probability distribution of all possible
sample proportions is the sampling
distribution of the sample proportion p̂.
 For large sample n (np≥5 and n(1-p)≥5), the
sampling distribution of the sample
proportion p̂ is approximately normal with a
mean p and standard deviation

pˆ  p1p / n
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The Sampling distribution of a sample
proportion

 p (1 p ) 
pˆis approximately N p , 
 n 

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Example
 In a local university, 10% of the students live
in the dormitories. A random sample of 100
students is selected for a particular study.
 If p=0.10, we can assume the sampling
distribution of p̂ is normally distributed
 np = 100(0.10) = 10 > 5
 n(1-p) = 100(0.90) = 90 > 5

(0.10)(0.90)
 p̂  0.10 and  p̂   0.03
100

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Example
 So, p̂ is approximately normal with mean
0.10 and standard deviation 0.03.
a) What is the probability that the sample proportion
is between 0.172 and 0.178?
P(0.172<p̂<0.178)= P(p̂<0.178)- P(p̂<0.172)
= 0.9953-0.9918=0.0035
b) What is the probability that the sample proportion
(the proportion living in the dormitories) is
greater than 0.025?
P(p>0.025)̂ = 1-P(p<0.025)̂
= 1-0.0062=0.9938
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Exercise
 In a restaurant, the proportion of people who
order coffee with their dinner is 0.9. A simple
random sample of 144 patrons of the restaurant
is taken.
a) What are the expected value, standard deviation,
and shape of the sampling distribution of ?
b) What is the probability that the proportion of
people who will order coffee with their meal is
between 0.85 and 0.875?
c) What is the probability that the proportion of
people who will order coffee with their meal is at
least 0.945?

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