Business Statistics in Practice 8th

Edition Bowerman Solutions Manual

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 Chapter 7
Sampling and Sampling
Distributions

Copyright ©2017 McGraw-Hill Education. All rights reserved.

Sampling Distributions
7.1 The Sampling Distribution of the Sample Mean
7.2 The Sampling Distribution of the Sample
Proportion
7.3 Derivation of the Mean and the Variance of the
Sample Mean

7-2
LO 7-1: Describe and
use the sampling
distribution of the
sample mean. 7.2 Sampling Distribution of
the Sample Mean
The sampling distribution of the sample mean
x is the probability distribution of the
population of the sample means obtainable
from all possible samples of size n from a
population of size N

7-3
LO7-1

Example 7.1: The Car Mileage Case

 New model car
 Six preproduction cars
 Two tested for mileage
 30 and 32 mpg
 Average is 31 mpg (sample mean or 𝑥 )
 Estimate of population mean μ
 Remaining four cars tested
 29, 31, 33, and 34 mpg
 Population mean (μ) is
29:30:31:32:33:34
𝜇= = 31.5
6

7-4
LO7-1
Example 7.1: A Probability
Distribution Describing the Population

7-5
Table 7.1
LO7-1
Example 7.1: The Population of
Sample Means

7-6
Table 7.2
LO7-1
Example 7.1: A Graph of the
Probability Distribution

7-7
Figure 7.1
LO7-1

Some Notes
 In many situations, the distribution of the population
of all possible sample means looks roughly like a
normal curve
 If the population is normally distributed, then for any
sample size n the population of all possible sample
means is also normally distributed
 The mean, 𝜇𝑥 , of the population of all possible
sample means is equal to μ
 The standard deviation, 𝜎𝑥 , of the population of all
possible sample means is less than σ

7-8
LO7-1

General Conclusions
 If the population of individual items is normal,
then the population of all sample means is
also normal

 Even if the population of individual items is

not normal, there are circumstances when the
population of all sample means is normal
(Central Limit Theorem)

7-9
LO7-1

General Conclusions Continued

 The mean of all possible sample means equals the
population mean
 That is, 𝜇 = 𝜇𝑥

 The standard deviation sx of all sample means is less

than the standard deviation of the population
 That is, 𝜎𝑥 < 𝜎
 Each sample mean averages out the high and the low
measurements, and so are closer to m than many of
the individual population measurements

7-10
LO7-1

The Empirical Rule

 The empirical rule holds for the sampling
distribution of the sample mean
 68.26% of all possible sample means are
within (plus or minus) one standard deviation
sx of m
 95.44% of all possible observed values of x
are within (plus or minus) two sx of m
 99.73% of all possible observed values of x
are within (plus or minus) three sx of m

7-11
LO7-1
Properties of the Sampling Distribution of
the Sample Mean
 If the population being sampled is normal,
then so is the sampling distribution of the
sample mean, x

 The mean sx of the sampling distribution of x

is mx = m
 That is, the mean of all possible sample
means is the same as the population mean

7-12
LO7-1
Properties of the Sampling
Distribution of the Sample Mean #2
 The variance s2x of the sampling distribution
𝜎2
of x is 𝜎𝑥2 =
𝑛

 That is, the variance of the sampling

distribution of x is
 Directly proportional to the variance of the
population
 Inversely proportional to the sample size

7-13
LO7-1
Properties of the Sampling
Distribution of the Sample Mean #3
 The standard deviation sx of the sampling
𝜎
distribution of x is 𝜎𝑥 =
𝑛

 That is, the standard deviation of the

sampling distribution of x is
 Directly proportional to the standard deviation
of the population
 Inversely proportional to the square root of the
sample size

7-14
LO7-1

Notes
 The formulas for s2x and sx hold if the sampled population is
infinite
 The formulas hold approximately if the sampled population is
finite but if N is much larger (at least 20 times larger) than the
n (N/n ≥ 20)
 x is the point estimate of m, and the larger the sample
size n, the more accurate the estimate
 Because as n increases, sx decreases as 1/√n
 Additionally, as n increases, the more

representative is the sample of the population

 So, to reduce sx, take bigger samples!

7-15
LO7-1

Effect of Sample Size

7-16
Figure 7.3
LO7-1

Car Mileage Statistical Inference

 Recall from Chapter 3 example, x = 31.56
mpg for a sample of size n=50 and s = 0.8

 If the population mean µ is exactly 31, what is

the probability of observing a sample mean
that is greater than or equal to 31.56?

7-17
LO7-1

Car Mileage Statistical Inference #2

 Calculate the probability of observing a

sample mean that is greater than or equal to
31.6 mpg if µ = 31 mpg
 Want P(x > 31.5531 if µ = 31)

 Use s as the point estimate for s so that

𝜎 0.8
𝜎𝑥 = = = 0.113
𝑛 50

7-18
LO7-1

Car Mileage Statistical Inference #3

 31.56  m x 
 Then P x  31.56 if m  31  P z  
 sx 
 31.56  31 
 P z  
 0.113 
 P z  4.96

 But z = 4.96 is off the standard normal table

 The largest z value in the table is 3.99, which
has a right hand tail area of 0.00003

7-19
LO7-1

Car Mileage Statistical Inference #4

 z = 4.96 > 3.99, so P(z ≥ 4.84) < 0.00003
 If μ = 31 mpg, fewer than 3 in 100,000 of all samples
have a mean as large as observed
 Have either of the following explanations:
 If μ is actually 31 mpg, then very unlucky in picking this
sample
 Not unlucky, μ is not 31 mpg, but is really larger

 Difficult to believe such a small chance would occur,

so conclude that there is strong evidence that μ does
not equal 31 mpg
 Also, μ is, in fact, actually larger than 31 mpg

7-20
LO 7-2: Explain and
use the Central Limit
Theorem.

Central Limit Theorem

 Now consider a non-normal population
𝜎
 Still have 𝜇𝑥 = 𝜇 and 𝜎𝑥 =
𝑛
 Exactly correct if infinite population
 Approximately correct if population size N finite but
much larger than sample size n
 But if population is non-normal, what is the shape of
the sampling distribution of the sample mean?
 The sampling distribution is approximately normal if the
sample is large enough, even if the population is non-
normal (Central Limit Theorem)

7-21
LO7-2

The Central Limit Theorem Continued

 No matter the probability distribution that
describes the population, if the sample size n
is large enough, the population of all possible
sample means is approximately normal with
𝜎
mean 𝜇𝑥 = 𝜇 and standard deviation 𝜎𝑥 =
𝑛
 Further, the larger the sample size n, the
closer the sampling distribution of the sample
mean is to being normal
 In other words, the larger n, the better the
approximation

7-22
LO7-2

Effect of Sample Size

7-23
Figure 7.5
LO7-2

How Large?
 How large is “large enough?”
 If the sample size is at least 30, then for most
sampled populations, the sampling distribution of
sample means is approximately normal
 Here, if n is at least 30, it will be assumed that
the sampling distribution of x is approximately
normal
 If the population is normal, then the
sampling distribution of x is normal
regardless of the sample size

7-24
LO7-2

Unbiased Estimates
 A sample statistic is an unbiased point
estimate of a population parameter if the
mean of all possible values of the sample
statistic equals the population parameter
 𝑥 is an unbiased estimate of m because
𝜇𝑥 = 𝜇
 In general, the sample mean is always an
unbiased estimate of m
 The sample median is often an unbiased
estimate of m but not always
7-25
LO7-2

Unbiased Estimates Continued

 The sample variance s2 is an unbiased
estimate of s2
 That is why s2 has a divisor of n – 1 and not n

 However, s is not an unbiased estimate of s

 Even so, the usual practice is to use s as an
estimate of s

7-26
LO7-2

Minimum Variance Estimates

 Want sample statistic to have small standard
deviation
 All values should be clustered around the
population parameter
 Statistic from any sample should be close to the
population parameter
 Given a choice between unbiased estimates, choose
one with smallest standard deviation
 The sample mean and the sample median are
both unbiased estimates of m
 The sampling distribution of sample means
generally has a smaller standard deviation than
that of sample medians

7-27
LO7-2

Finite Populations
 If a finite population of size N is sampled
randomly and without replacement, must use the
“finite population correction” to calculate the
correct standard deviation of the sampling
distribution of the sample mean
 If N < 20  n
𝜎 𝜎
 Otherwise 𝜎𝑥 ≠ but instead 𝜎𝑥 <
𝑛 𝑛
𝑁;𝑛
 The finite population correction is
𝑁;1
𝜎 𝑁;𝑛
 The standard error is 𝜎𝑥 =
𝑛 𝑁;1

7-28
LO 7-3: Describe and
use the sampling
distribution of the
sample proportion. 7.2 Sampling Distribution of the
Sample Proportion
 The distribution of all possible sample proportions is
the sampling distribution of the sample proportion
 If a random sample of size n is taken from a
population 𝑝 then the sampling distribution of the
sample proportion is
 Approximately normal, if n is large
 Has a mean that equals ρ
𝑝 1;𝑝
 Has standard deviation 𝜎𝑝 =
𝑛
 Where ρ is the population proportion and 𝑝 is the
sampled proportion

7-29
7.3 Derivation of the Mean and the Variance
of the Sample Mean (Optional)
 Given the following:
1. The mean of xi, denoted μxi, is μ is the mean
of the population from which xi will be
randomly selected
 That is μx1 = μx2 = … = μxn = μ
2. The variance of xi, denoted σ2xi, is σ2 the
variance of population from which xi will be
randomly selected
 That is σ2x1 = σ2x2 = … = σ2xn = σ2
 Sample mean is the average of the xi’s
 We can prove that μ = μ
7-30