Understanding sampling variation

94 88 Sample 3 cases
65

78 81
60

Population
1
 Understanding sampling variation

94 Sample 3 cases
65 81 88

78 60

Sample mean = 78

Population
2
Understanding sampling variation

94 88 Sample 3 cases

65 78
60

81

Sample mean = 67.7

Population
3
 Understanding sampling variation

65 Sample 3 cases
94 88
81

78 60

Sample mean = 87.7

Population
4
 Population of sample means
Original Population for all possible samples of size
3 from original population
65 94 88 78 81 60
82.3 79.0 80.0 73.0
Mean  = 77.67 77.0 78.0 71.0 74.7
SD  = 11.95 67.7 68.7 86.7 87.7
80.7 84.3 77.3 78.3
82.3 75.3 76.3 73.0
Mean = 77.67
SD = 5.35

Sample means have – same mean as population

– smaller SD than population
5
General rule.
If: • we have a population of N individuals with
population standard deviation ,
• we take all possible simple random samples of size
n, and
• n is small compared with the population size N,
then, the standard deviation of the sample means is –

n
Standard error of x : x  / n
(Note: in our example N = 6 and n = 3.
Last condition doesn’t apply.) 6
Putting it all together:

The Central Limit Theorem

- a remarkable result!

For random samples of size n from a population

with mean  and standard deviation , if n is
large enough, the sampling distribution of the
mean is approximately Normal with mean  and
standard deviation /n.
7
 Putting it all together:

The Central Limit Theorem (CLT)

Notes:
• If the population random variable is X, CLT says
that, under certain conditions, the distribution of x
is Normal, no matter what the distribution of X
may be.
• The required conditions are
• simple random sampling, and
• n ‘large enough’

8
 An application:
The weights of animals at a market yard have a mean of
16kg and a standard deviation of 4kg. What is the
probability that the average weight of 100 animals will
be between 15kg and 17kg?

Solution: We want p( 15  x  17).

n is large, so if sampling was random, the
sampling distribution of the mean will be
approx. Normal with mean 16kg and standard
error 4/ 100 = 0.4kg.
p( 15  x  17) = p( -2.5  Z  2.5)
= 0.9876
9
An application:
Suppose sales each day at a store are independently and
normally distributed with a mean of $200 and a SD of
$30. What is the probability that average daily sales over
a randomly chosen 5-day week exceed $210?

Solution: The sampling distribution of the weekly

mean x is Normal with mean = $200 and
standard error = 30/ 5 = $13.42.

We want p( x > 210) = p( Z > 10/13.42)

= p( Z > 0.75)
= 0.2266

10
An application (acceptance sampling):
Diameters of widgets are approximately normally
distributed with a mean of 10cm and a standard deviation
of 0.5cm. A sample of 9 widgets is taken at random from
each batch produced. The batch is accepted if the mean
diameter of the sample is within 0.5cm of the mean.
What proportion of batches will be accepted?
Solution: We accept if 9.5  x  10.5.
The sampling distribution of x is approx.
Normal with mean = 10cm and standard
error = 0.5/ 9 = 0.1667cm.
p( 9.5  x  10.5) = p(-3  Z  3)
= 0.9974 11
If the sample comes from a population which has
a normal distribution then

• x has a t-distribution

s/ n
• there are different t-distributions for
different sample sizes
• they look like standard normal distributions but
stretched out in the tails
• for estimating a single mean we use a t-distributi
on with n-1 degrees of freedom (df)
• tn-1 approaches a normal distribution as n gets
bigger. For n ≥ 30, there isn’t much difference. 12
Tables:

df t 0.05 t 0.025 t 0.01 t 0.005

1 6.314 12.706 31.82 63.66

2 2.920 4.303 6.965 9.925
……..
29 1.699 2.045 2.462 2.756
inf 1.645 1.960 2.326 2.576

13
The chi-squared ( 2) distribution

Zi i=1…n are i.i.d N(0,1),

n
  Z
2
i
2
With n degree of freedom.

i 1

( n  1) s 2
Follows  2 with n-1 degree of freedom.
 2
The chi-squared ( 2) distribution

5%
df \  0.05 0.025 0.01

1 3.84 5.02 6.63

0 7.81
2 5.99 7.38 9.21
3 7.81 9.35 11.34
4 9.49 11.14 13.28
5 11.07 12.83 15.09
6 12.59 14.45 16.81