Statistics for Management II

Chapter One
SAMPLING AND SAMPLING DISTRIBUTIONS
Content
 Sampling Theory
• The need for sampling
• Sampling and non sampling errors
• Sampling Techniques
 Sampling distribution
• Sampling distribution for the mean
• Sampling distribution for the proportion
Definitions of Terms
1. Parameter: Characteristic or measure obtained
from a population.
2. Statistic: Characteristic or measure obtained from
a sample.
3. Sampling: The process or method of sample
selection from the population.
4. Sampling unit: the ultimate unit to be sampled or
elements of the population to be sampled.
Example: If one studies performance of freshman students in
St. Mary’s University, the student is the sampling unit.
Sampling Theory
• Sampling theory is a study of the relationships
existing between a population and samples drawn
from the population.
• The theory of sampling studies the relationship that
exists between the universe and the sample drawn
from it.
• Sampling theory is applicable only to random
samples.
5. Sampling frame: is the list of all
elements in a population under study.
Examples: List of households.
List of students in registrar
The Need for Sampling

 Reduced cost
 Greater speed
 Greater accuracy
 Greater scope
 More detailed information can be
obtained.
Errors in sample survey

There are two types of errors

A) Sampling error:
 It is the discrepancy between the population value and
sample value.
 May arise due to inappropriate sampling techniques
applied
B) Non sampling errors: are errors due to procedure
bias such as:
 Due to incorrect responses
 Measurement
 Errors at different stages in processing the data.
There are two types of selections
A. Sampling with replacement is a unit from a
population is returned or replaced to the population
before the next selection is made.
 The population size at each selection remain the
same (constant),
 A unit can have a chance of selection more than
once.
 The probability at each selection of a unit is
the same.
 We have Nn possible samples.
B. Sampling without replacement a unit
selected from a population is not returned or
replaced to the population for the next selection.
 The population size reduces by one for each
selection from the immediate preceding one.

 There are NCn (N combination of n) possible

samples.
Sampling Techniques
• There are two types of sampling
1. Random Sampling or probability sampling
– Simple random sampling
– Stratified random sampling
– Cluster sampling
– Systematic sampling
2. Non random sampling or non probability sampling
– Judgment sampling.
– Convenience sampling
– Quota Sampling
Random Sampling or probability Sampling
I. Simple Random Sampling:
 Every possible sample has an equal chance of
being selected. In this case, sampling may be with
or without replacement.
 All elements in the population have the same pre-
assigned non-zero probability to be included in to
the sample.
 Simple random sampling can be done either using
the lottery method or table of random numbers.
IV. Systemic Sampling
 A complete list of all elements within the
population (sampling frame) is required.
 The procedure starts in determining the first
element to be included in the sample.
 Then the technique is to take the kth item from the
sampling frame.
• Let,
II. Stratified Random Sampling
 The population will be divided in to non-overlapping
group but exhaustive groups called strata.
 Simple random samples will be chosen from each
stratum.
 Elements within strata is homogeneous.
 Elements across strata is heterogeneous.
 It is applied if the population is heterogeneous.
• Examples Sex ( Male and Female)
Age ( 18, 28, 29, 37 etc)
Sub city ( Lideta, Yeka, Bole…)
III.Cluster Sampling
 The population is divided in to non-overlapping groups called
clusters.
 A simple random sample of groups or cluster of elements is
chosen and all the sampling units in the selected clusters will be
surveyed.
 Elements within a cluster are heterogeneous.
 Elements across a cluster are homogeneous
 Cluster sampling is useful when it is difficult or costly to
generate a simple random sample.
 For example, to estimate the average annual household income
in a large city we use cluster sampling, because to use simple
random sampling we need a complete list of households in the
city from which to sample.
 2. Non random sampling or non probability
sampling
• The choice of individuals for a sample depends on the basis
of convenience, personal choice or interest.
I. Judgment Sampling
• In this case, the person taking the sample has direct or
indirect control over which items are selected for the sample.
II. Convenience Sampling
• In this method, the decision maker selects a sample from the
population in a manner that is relatively easy and convenient
III. Quota Sampling
» In this method, the decision maker requires the sample to
contain a certain number of items with a given characteristic.
Many political polls are, in part, quota sampling.
1.2 Sampling distribution
• A sampling distribution is a probability
distribution for the possible values of a sample
statistic, such as a sample mean.
• NOTE: The normal probability distribution is used
to determine probabilities for the normally
distributed individual measurements, given the
mean and the standard deviation.
• Symbolically, the variable is the measurement X,
with the population mean µ and population
standard deviation δ.
Sampling Distribution of the Mean
Properties of the Sampling Distribution of Means
 3. The sampling distribution of means is approximately normal
for sufficiently large sample sizes (n≥ 30).

Example:
• A population consists of the following ages: 10, 20, 30, 40, and
50. A random sample of three is to be selected from this
population and mean computed. Develop the sampling
distribution of the mean.
Solution:
• The number of simple random samples of size n that can be
drawn without replacement from a population of size N is NC n.
With N= 5 and n = 3, 5C3 = 10 samples can be drawn from the
population as:
 Central Limit Theorem and the Sampling Distribution of the Mean

The relationship between the shape of the population distribution

and the shape of the sampling distribution of the mean is called
the Central Limit Theorem.

The Central Limit Theorem (CLT) states that:

1) If the population is normally distributed, the distribution of sample
means is normal regardless of the sample size.
2) If the population is not normal, the distribution of sample means
will be approximately normal if the sample size (n) is sufficiently
large (n ≥ 30).
 The larger the sample size is used, the closer the sampling
distribution is to the normal curve.
Example 1

1. The distribution of annual earnings of all bank tellers with

five years of experience is skewed negatively. This
distribution has a mean of Birr 15,000 and a standard
deviation of Birr 2000. If we draw a random sample of 30
tellers, what is the probability that their earnings will
average more than Birr 15,750 annually? And interpret the
result?
Steps
1. Calculate standard deviation of the mean
2. Calculate Z for sample mean
3. Find the area covered by the interval
4. Interpret the result
Solution
Example 2:
• Suppose that during any hour in a large department store, the
average number of shoppers is 448, with a standard
deviation of 21 shoppers. What is the probability of
randomly selecting 49 different shopping hours, counting the
shoppers, and having the sample mean fall between 441 and
446 shoppers, inclusive?
Solution
Sampling Distribution of Proportions
• The sample proportion is computed by dividing the
frequency that a given characteristic occurs in a sample by
the number of items in the sample.
Properties of Sampling distribution of
).

Proportion

Where P= population proportion

q=1–P
n = sample

Pq N n
P  *
n N 1

N n = finite population correction factor.

N 1
 Central Limit Theorem (CLT) and Sampling
distribution of P

• The CLT states the shape of the distribution of sample

proportions is approximately normal if np and nq is
greater than 5.
• And solve the problems by using the following
equations .
PP
 P  P ,  P  Pq n and Z P 
P

P
• NB: The sampling distribution of can be approximated by a
normal distribution whenever the sample size is large i.e., np and
nq>5.
Example:

1. Suppose that 60% of the electrical contractors

in a region use a particular brand of wire. What
is the probability of taking a random sample of
size 120 from these electrical contractors and
finding that 0.5 or less use that brand of wire?

• Solution
n = 120 P = 0.6 q = 0.4
Example 2:

2. If 10% of a population of parts is defective, what is

the probability of randomly selecting 80 parts and
finding that 12 or more are defective?
Solution:
n = 80
P = 0.1
X = 12
1. Check that np and nq > 5
80*0.1= 8 and 80*0.9= 72 both grater than 5
 CLASS WORK
1. Consider a population of size 10 with population
mean, =140 and population Standard deviation is 30
and all possible samples of size 5. Find the
following if sampling is without replacement.
A. Number of samples.
B. Mean of the sampling distribution of the sample
mean.
C. Standard deviation of the sampling distribution
of the sample means.
2. The mean dying rate of mice administered to a
given dosage of an experimental drug is 45with a
variance of 25. What is the probability that among
the mice, which received the drug, more than 50
will die? Assume normality
3. 25% of all Ethiopian households had VCR in 2002.
If 500 households are randomly selected from the
population, what is the probability that 100 or more
households have VCR?
Thank You !!!