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STAT 506 Sampling Theory and Methods

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6.2 - The Stratification Principle

The Stratification Principle

If your only objective of stratification is to produce estimators with small variances,
then we want to stratify such that within each stratum, the units are as similar as
possible. In a survey of the human population, stratification may be based on
socioeconomic factors or geographic regions.

For example, to estimate the average starting income for recent Penn State
graduates, it would make sense to stratify by the department since the starting
income for graduates of the same department would be similar.

Allocation in Stratified Random Sampling

The question is, given a total sample size of n, how do we allocate these among L
strata?

Try it!
If our objective is to use an allocation that gives us a specified amount of
information at minimum cost, then the best allocation scheme is affected by
what three factors?

Hide Answer

The best allocation scheme is affected by the following three factors:

1. the total number of elements in each stratum,

2. the variability of the measurements within each stratum, and
 3. the cost associated with obtaining an observation from each
stratum.

If we don't have all this information, but we know the total number, we can use a
simplistic allocation. This is a proportional allocation that will maintain a steady
sampling fraction throughout the population.

This does not take into consideration the variability within each stratum and is not
the optimal choice.

If the cost of sampling from each stratum is the same, then the optimal allocation
(the allocation with the lowest variances) is:

 read text section 11.8 for proof

However, if the cost of sampling differs from stratum to stratum and the total cost
is:

where is the overhead cost, is the cost per unit for stratum h. The optimal
allocation is:

Note!
1. the sample size is directly proportional to and , i.e., allocate a larger
sample size to the larger and more variable stratum.
2. the sample size is inversely proportional to , i.e., this allocates smaller
sample sizes to the more expensive stratum.

In order to use the optimal allocation, one must be able to estimate σh

Let's take a look at this in the context of the TV Example...

 Try it!
For the Average Hours Watching TV Example, if before the advertising the
firm conducts the survey they have already estimated that
. Now, if the cost of obtaining an observation is
about the same for the three areas, (e.g., telephone interview), then what is
the optimal allocation if they want to sample 40 households?

Hide Answer

Optimal allocation:

where,

Then,

Thus we will choose and .

Remember, it is important that in this case.

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Lesson

Lesson 1: Estimating Population Mean and Total under SRS

Lesson 2: Confidence Intervals and Sample Size

Lesson 3: Unequal Probability Sampling

Lesson 4: Auxiliary Data and Ratio Estimation

Lesson 5: Auxillary Data and Regression Estimation

Lesson 6: Stratified Sampling

6.1 - How to Use Stratified Sampling

6.2 - The Stratification Principle
6.3 - Poststratification and further topics on stratification

Lesson 7: Part 1 of Cluster and Systematic Sampling

Lesson 8: Part 2 of Cluster and Systematic Sampling

Lesson 9: Multi-stage Designs

Lesson 10: Double or Two-Phase Sampling

Lesson 11: Applied Problems for Survey Sampling

Lesson 12: Capture - Recapture Sampling, Random Response Model

Lesson 13: Line and Point Transects