Statistical Inference

Sampling Distribution of Mean

Important Definitions

1. A statistic is a characteristic of a sample. A parameter is a characteristic of a population.

2. A statistic is a characteristic that depends only on the observed random sample.
3. The standard deviation of the distribution of a sample statistic is known as the standard error of the
statistic.

Example # 1

Suppose a population consists of four elements, {0,1,2,3}. Draw all possible samples of size two without
replacement. Prove that

A. μ=x
B. var( x ) = ×

Solution

Number of samples = m = NCn = 4C2 = 6

Sample Sample Mean ( x ) x2 X X2

0, 1 0.5 0.25 0 0
0, 2 1 1 1 1
0, 3 1.5 2.25 2 4
1, 2 1.5 2.25 3 9
1, 3 2 4 6 14
2, 3 2.5 6.25
Total 9 16

μ= x=
= =
μ = 1.5 x = 1.5

Hence it has been proved that μ = x

var( x ) = ×

var( x ) = -

= -

var( x )= 0.41667

σ2 = -

= -
σ2 = 1.25

× = ×
= 0.41667

Hence var( x ) = × has proved.

Example # 2

Suppose a population consists of three elements, {9,8,11}. Draw all possible samples of size two with
replacement. Prove that

A. μ=x
B. var( x ) =
Solution

Number of samples = m = Nn = 32 = 9

Sample Sample Mean ( ) x2 X X2

9, 9 9 81 9 81
9, 8 8.5 72.25 8 64
9, 11 10 100 11 121
8, 9 8.5 72.25 28 266
8, 8 8 64
8, 11 9.5 90.25
11, 9 10 100
11, 8 9.5 90.25
11, 11 11 121
Total 84 791

μ= x=
= =
μ = 9.33 x = 9.33

Hence it has been proved that μ = x

var( x ) =

var( x ) = -

= -

var( x )= 0.7778

σ2 = -

= -

σ2 = 1.5556

=
= 0.7778

Hence var( x ) = has proved.

Exercise
Q1. Draw all possible samples of size 2 with replacement from the population 9, 11, 15, 21. Show that the
mean of all sample means is equal to population mean and variance of all sample means is half of the
population variance.

Q2. Draw all possible samples each of size 3 without replacement from the population:
15, 24, 38, 10, 40, 32
Show that sample mean is an unbiased estimate of the population mean.

Q3. If the size of a sample is 81 and the standard error of the mean is 4. What should be the size of the sample
if standard error is reduced to 3.6. What is additional measurement?

Q4. If the size of a sample (n), is 36 and the standard error of the mean is 2, what should be the size of the
sample if the standard error is to be reduced to 1.2?

Q5. Suppose we have a population: 6,7,8,9 and 15. Draw all possible samples of size three without
replacement. Prove that

A. μ=x
B. var( x ) = ×

The Central Limit Theorem (CLT)

For a relatively large sample size, the variable is approximately normally distributed, regardless of the distribution
of the variable under consideration.

The approximation becomes better with increasing sample size.

Roughly speaking, the farther the variable under consideration is from being normally distributed, the larger the
sample size must be for a normal distribution to provide an adequate approximation to the distribution of .

Usually, however, a sample size of 30 or more (n ≥ 30) is large enough.

Example:
Birth weights of male babies have a standard deviation of 1.33 lb. Determine the percentage of all samples of 400
male babies that have mean birth weights within 0.125 lb (2 oz) of the population mean birth weight of all male
babies. Interpret your answer in terms of sampling error.

Solution:
Percentage of all samples of 400 male babies that have mean birth weights within 0.125 lb of the population
mean birth weight

Thus, the percentage of all samples of 400 male babies that have mean birth weights within 0.125 lb of the
population mean birth weight of all male babies is (approximately) equal to the area under the normal curve with
parameters μ and 0.0665 that lies between μ − 0.125 and μ + 0.125.
The corresponding z-scores are, respectively,

Referring now to Z-Table, we find that the area under the standard normal curve between −1.88 and 1.88 equals
0.9398. Consequently, 93.98% of all samples of 400 male babies have mean birth weights within 0.125 lb of the
population mean birth weight of all male babies.

Interpretation There is about a 94% chance that the sampling error made in estimating the mean birth weight of
all male babies by that of a sample of 400 male babies will be at most 0.125 lb.

Exercise:
1- The mean monthly salary of classroom teachers is Rs.49.0 thousand. Assume a standard deviation of Rs.9.2
thousand. Do the following for the variable “monthly salary” of classroom teachers.
a. Determine the sampling distribution of the sample mean for samples of size 64. Interpret your answer
in terms of the distribution of all possible sample mean salaries for samples of 64 classroom teachers.
b. What is the probability that the sampling error made in estimating the population mean salary of all
classroom teachers by the mean salary of a sample of 64 classroom teachers will be at most Rs.1000?

Answers:
a. Approximately a normal distribution with a mean of 49.0 thousand and a standard deviation of 1.15
thousand. Thus, for samples of 64 classroom teachers in the school system, the possible sample mean
monthly salaries are approximately normally distributed with a mean of Rs.49.0 thousand and a standard
deviation of Rs.1.15 thousand.
b. b. 0.6156
2- According to the article, the loan amounts of loans originated by a large insurance company lender have a
mean of $6.74 million with a standard deviation of $15.37 million. The variable “loan amount” is known to
have a right-skewed distribution.
a. Using units of millions of dollars, determine the sampling distribution of the sample mean for samples
of size 200. Interpret your result.
b. What is the probability that the sampling error made in estimating the population mean loan amount by
the mean loan amount of a simple random sample of 200 loans will be at most $1 million?
3- According to the article, the standard deviation of the length of time that women with one job are employed
during the first 8 years of their career is 92 weeks. Length of time employed during the first 8 years of career is
a left-skewed variable. For that variable, do the following tasks.
a. Determine the sampling distribution of the sample mean for simple random samples of 50 women with
one job. Explain your reasoning.
b. Obtain the probability that the sampling error made in estimating the mean length of time employed by
all women with one job by that of a random sample of 50 such women will be at most 20 weeks.