Case Study

Located on the outskirts of a large city, the suburb of Peaceful Valley comprises approximately
6,000 upscale homes. The subdivision was made 10 years ago when a developer built an earthen
dam on Peaceful River, creating Peaceful Lake, a meandering 20-acre body of water. The lake
became the centerpiece of the development, and the first 1,000 half-acre lots were sold as lakefront
property. Now Peaceful Valley is fully developed, with 50 streets all approximately the same
length, each with about 120 houses on it. Peaceful Valley’s residents are primarily young,
professional, dual-income families with one or two school-age children.
Peaceful Valley has not been living up to its name in recent months. The Suburb Steering
Committee has recommended that the community build a swimming pool, tennis court, and
meeting room facility on four adjoining vacant lots in the back of the subdivision. Construction
cost estimates range from $2.5 million to $3 million depending on the size of the facility. Currently,
every Peaceful Valley homeowner is billed $2,400 annually ($200 per month) for maintenance,
security, and upkeep of the development. About 75% of residents pay this fee. To finance the
proposed recreational facility, every Peaceful Valley household would be expected to pay a one-
time fee of $3,500, and annual fees would increase to $3,600 based on facility maintenance cost
estimates.
Objections to the recreational facility come from various quarters. For some, the one-time fee is
unacceptable; for others, the idea of a recreational facility is not appealing. Some residents have
their own swimming pools, belong to local tennis clubs, or otherwise have little use for a meeting
room facility. Other Peaceful Valley homeowners see the recreational facility as a wonderful
addition where their children could learn to swim, play tennis, or just hang out under supervision.
The president of the Peaceful Valley Suburb Association has decided to conduct a survey to poll
the opinions and preferences of Peaceful Valley homeowners regarding the swimming pool, tennis
court, and meeting room facility concept. Review the following possible sample methods.
Indicate your reactions and answers to the questions associated with each possible method.
1. There is only one street into and out of the subdivision. The president is thinking of paying
his teenage daughter to stand at the stop light at the entrance to Peaceful Valley next week
between the hours of 7:00 and 8:30 a.m. to hand out questionnaires to drivers while they
wait for the red light to change. The handouts would include addressed, postage-paid
envelopes for returns. Identify what sample method the president would be using, list its
pros and cons, and indicate how representative the resulting sample would be.
2. The chairperson of the Suburb Steering Committee thinks that the 1,000 people whose
houses are on the waterfront of Peaceful Lake are the best ones to survey because they paid
more for their lots, their houses are bigger, and they tend to have lived in Peaceful Valley
longer than other residents. If these 1,000 homeowners are used for the sample, what
sample method would be involved, what are its pros and cons, and how representative a
sample would result?
3. Assume that the Steering Committee chairperson’s assumption that the 1,000 waterfront
owners are not the same as the other 5,000 homeowners in the subdivision is true. How
 should this knowledge be used to draw a representative sample of the entire subdivision?
Identify the probability sampling method that is most appropriate, and indicate, step by
step, how it should be applied.
4. How would you select a simple random sample of those Peaceful Valley homeowners who
paid their subdivision association dues last year? What, if any, sample bias might result
from this approach?
5. How could a two-step cluster sample be used here? Identify this sample method and
describe how it could be used to select a representative sample of Peaceful Valley
households.