INTRODUCTION TO INFERENTIAL

STATISTICS
SAMPLING DISTRIBUTIONS
 INTRODUCTION TO INFERENTIAL STATISTICS
• Statistical inference is the process of making generalizations about a
population from a sample.
Since most of the characteristics of a population can be described by
parameters, inferential statistics primarily deals

with the estimation of an unknown with the verification whether a belief

population parameter from the or hypothesis about a parameter is
corresponding sample statistic. supported by the sample evidence.

Estimation Hypothesis testing

(E.g.: Estimating probability (E.g.: We believe that the
measures from relative probability of an event is 0.2 and
frequencies.) using just a sample we want to find
out whether this is a reasonable
assumption.)

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 • The key concept behind these statistical procedures is the probability
distribution, called sampling distribution, of a sample statistic.

A summary of all possible values of a statistic

along with the corresponding probabilities.

Ex 1:
Suppose we are interested in the following population: X = {1,2,3,4,5).
a) Since this is a very small population (Nx = 5), it is easy to observe the whole
population, to illustrate it with a relative frequency histogram and to find the
parameters, like the population mean and the population variance.
Population of X

0.25 x  3 and  x2  2
0.20

0.15

0.10

0.05
x  2
0.00
1 2 3 4 5

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b) Now consider the hypothetical exercise where, we draw all possible
samples of size two (n = 2) with replacement.
There are 25 possible samples. They are shown in the first row and first
column of the table below.
Compute the sample mean from each of these samples.
(E.g.: If x1 = 1 and x2 = 4, x-bar is 2.5.)

1st draw (x1)

x 1 2 3 4 5
These sample mean values
1 1.0 1.5 2.0 2.5 3.0 form a second population of
X-bar values.
2nd draw (x2)

2 1.5 2.0 2.5 3.0 3.5

N x  25
3 2.0 2.5 3.0 3.5 4.0
4 2.5 3.0 3.5 4.0 4.5
x  3

5 3.0 3.5 4.0 4.5 5.0  x2  1 x 1

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d) Compare the X, and X-bar populations to each other.

X X-bar

Size (N) 5 25

Mean (μ) 3 3

Variance (σ 2) 2 1

Std.Deviation σ 2 1

These results suggest that

i. X-bar is a larger populations than X.
ii. X, and X-bar have the same mean.
iii. X has the bigger variance

• The Standard deviation has the relationship   1  2 x

x1 
2 n
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Apart from their means and variances, the X-bar1 and X-bar2 populations can
also be characterized by their shapes.

Population of X-bar1

0.25

0.20

0.15

0.10

0.05

0.00
1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

This relative frequency histogram is a graphical representations of the X-bar

sampling distribution, symmetrical around µ = 3.

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• In practice, the target population is usually large.

The population about which we

want to draw inferences.
It is not necessarily the same as the sampled population, i.e.
the population from which we actually take the sample.

• How to take a sample?

In order to obtain reliable information from a sample

– The target and sampled populations should be very similar, or
the same if possible.

– The sample must be representative, i.e. it must have similar

attributes as the population itself.

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 Even a small random sample is likely to give us fairly
accurate information about the population.
(E.g. the sample mean is expected to be close to the
population mean.)
If the sample is not randomly selected, it is likely to produce misleading,
biased results, even if the sample is relatively large.

Random samples can be drawn in several different ways. The most basic
procedure is called simple random sampling.

Simple random sample: A sample in which every member of the

population is equally likely to be selected.

Assign a number to each population item, write the numbers on separate

slips of papers, toss them into a hat, shuffle them, and draw n of them one
by one.
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 When the population is large, sampling is more complicated.
In general, we need

– a clear definition of the target population

(e.g. voters of the next federal election);

– a sampling frame, i.e. the sampled population

(e.g. the electoral roll from the last federal election, which is certainly
not the same as the target population);

– a means of randomly selecting n items from the sampled population

(e.g. generate n uniform random numbers in the range 1 to N with
Excel , round each of them to the nearest integer, and select the
corresponding people from the electoral roll).

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 The difference between the parameter (such as μ) and the statistic (x-
bar) is called error.

Two major types of errors can arise.

Sampling error: Non-sampling error:

It is due to the difference between
the sample and the population.
It is not our fault and its expected
size can be reduced by using larger
samples.
If in the previous example, x1 = 1 and
x2 = 3, x-bar is 2. Since the true
mean of X is 3, the error is 1. This is
a sampling error.
It is due to improper sample
selection or to mistakes made in the
acquisition of data.
(E.g.: some registered voters cannot
be reached by phone,
some questions remain unanswered,
some responses are misunderstood
or inaccurately recorded, etc.)
It is our fault and its expected size
cannot be reduced by using larger
samples.

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 SAMPLING DISTRIBUTIONS

A sampling distribution can be described by its three important properties:

mean, standard deviation and shape.

The sampling distribution of the sample means calculated from random

samples of the same size have the following characteristics:

i.e. the expected value of the sample mean is the mean

1) x   of the sampled population.
The sample mean from a random sample is our
best guess of the true population mean.

2)  The standard deviation of the sample mean is called

x  the standard error.
n

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3) If the population (X) is normally distributed, X-bar is also
normally distributed, regardless of the sample size.

If the population (X) is not normally distributed, or we do not

know whether it is normal, we can rely on the
Central Limit Theorem (CLT):

If the sample size is large (say n  30), X-bar is

approximately normally distributed, regardless of the
shape of the population.

The more bell-shaped the population or/and the larger

the sample size, the more normally distributed the
sampling distribution.

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Ex 2: An automatic machine in a manufacturing process is operating properly
if the lengths of an import sub-component are normally distributed, with mean μ
= 117 cm and standard deviation σ = 2.1 cm.

X
a) Find the probability that one randomly selected unit has a length of greater
than 120 cm.
P( X  120)  P( Z  1.43)  0.5  P(0  Z  1.43)  0.5  0.4236  0.0764

120  117
z
2.1

b) Find the probability that if three units are randomly selected, their mean
length exceeds 120 cm. n

Since X is normally distributed, X-bar is also normal,

 2.1
 x    117 and  x    1.212
n 3
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 P( X  120)  P(Z  2.47)  0.5  P(0  Z  2.47)  0.5  0.4931  0.0068

120  117
z
1.212

The probability of randomly selecting one unit longer than 120 cm is

7.64%, while the probability of selecting three units with an average
length of greater than 120 cm is only 0.68%.

Ex 3:
Imagine we have a large population of, say, invoices with μ = $255.60 and σ =
$45.20.
If we draw a random sample of size 400 and calculate the average value of
these invoices, what is the probability that
a) it exceeds $260.00?
In this example we are not told whether the population of invoices is normally
distributed. However, since n = 400 we can rely on CLT.

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 
45.20
 x    255.60 and  x    2.26
n 400
P( X  260)  P( Z  1.95)

260  255.60
z
2.26
 0.5  P(0  Z  1.95)  0.5  0.4744  0.0256 or 2.56%

b) What is the probability that X-bar is between $250.00 and $265.00?

P(250  X  265)  P(2.48  Z  4.16)

250  255.60 265  255.60

z z
2.26 2.26
 P(0  Z  2.48)  P(0  Z  4.16)  0.4934  0.5  0.9934 or 99.34%

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 SAMPLING DISTRIBUTION of a proportion
• Let us suppose that a population has only two types of elements
(such as yes – no, female – male, defective – non-defective etc.),

Such a population is called binary population since it can be characterised as:

xi = 1 if A occurs, and 0 if A does not occur.

For a binary population, the mean is also the proportion.

N
1
p
N
x
i 1
i

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• Since the population proportion is the mean of a binary population,
most of what you have learnt about the estimation of a population mean
also applies to the population proportions.

Assuming that the sample is randomly selected,

a) The best point estimator of p is the sample proportion, p-hat:

1 n The number of ‘ones’ in

pˆ   xi the sample, i.e. the pˆ 
f
n i 1 frequency of event A, f. n

b) p-hat is a random variable and its sampling distribution could be

developed similarly to the sampling distribution of X-bar.

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 Draw all possible samples of the same size, calculate the sample
proportion from each of these samples, and prepare the relative
frequency distribution of p-hat.

Most of these p-hats are

different from p, and from
n, pˆ1 each other as well.

Possible The last possible From the relative frequency

sample of size n
samples of distribution it is possible to
the same n, pˆ 2 find the mean and the
n, pˆ L standard deviation of p-hat.
size, n

n, pˆ 3

we can rely on the fact that p-hat is a special sample mean, so its
expected value is μx and its variance is σx2/n.

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The sample proportion follows a binomial distribution with n and p
parameters.

However, this binomial distribution can be approximated by a normal

distribution when np and nq are at least 5.

The sampling distribution of the sample proportions calculated from

random samples of the same size have the following characteristics:

1)  pˆ  p i.e. the expected value of the sample proportion is the

population proportion itself.

2) pq granted that sampling is from a relatively large,

 pˆ  maybe infinite, population.
n (The population is considered to be large compared to the
sample if n/N<0.10, i.e. n is less than 10% of N.)

3) If the sample size is relatively large (np  5, nq  5), p-hat is

approximately normally distributed.

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Ex 4: p=0.1  q=0.9
From past experience 10% of electronic components received from a particular
manufacturer are defective. If, from a particular shipment, a random sample of
400 components is selected, what is the probability that the proportion of
defective parts in the sample is
n

a) between 10% and 11%?

Since np = 40 and nq = 360 are both over 5, p-hat is approximately normally
distributed with
Note: The standard
pq 0.1 0.9
 pˆ  p  0.1 and  pˆ    0.015 error of p-hat is
n 400 always very small.
Use at least three
decimal places.
P(0.10  pˆ  0.11)  P(0  Z  0.67)  0.2486

0.1  0.1 0.11  0.1

z z
0.015 0.015

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b) less than 9%?
0.09  0.1
P( pˆ  0.09)  P( Z  0.67) z
0.015
 P( Z  0.67)  0.5  P(0  Z  0.67)  0.5  0.2486  0.2514

c) Which is more likely: (i) more than 10.5% defective components in a

sample of 400, or (ii) more than 13% defective components in a sample of
100?
(i) P( pˆ  0.105)  P( Z  0.33)  0.5  0.1293  0.3707
(ii) If the sample size is just 100, not 400, then the standard error is

pq 0.1 0.9
 pˆ    0.03 (instead of 0.015)
n 100
and P( pˆ  0.13)  P( Z  1.00)  0.5  0.3413  0.1587 (i) is more
likely.
0.13  0.1
z
0.03

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