Sampling Distributions

Prof. Byeong-Yun Chang, Ph.D.,

MBA in IB
Ajou University

9.1
Sampling Distributions…
A sampling distribution is created by, as the name suggests,
sampling.

The method we will employ on the rules of probability and

the laws of expected value and variance to derive the
sampling distribution.

For example, consider the roll of one and two dice…

9.2
Sampling Distribution of the Mean…
A fair die is thrown infinitely many times,
with the random variable X = # of spots on any throw.

The probability distribution of X is:

x 1 2 3 4 5 6
P(x) 1/6 1/6 1/6 1/6 1/6 1/6

…and the mean and variance are calculated as well:

9.3
Sampling Distribution of Two Dice
A sampling distribution is created by looking at
all samples of size n=2 (i.e. two dice) and their means…

While there are 36 possible samples of size 2, there are only

11 values for , and some (e.g. =3.5) occur more
frequently than others (e.g. =1).
9.4
Sampling Distribution of Two Dice…
The sampling distribution of is shown below:
6/36
P( )
1.0 1/36 5/36
1.5 2/36
2.0 3/36
4/36
)
2.5 4/36
3.0 5/36
3/36
P(

3.5 6/36
4.0 5/36
4.5 4/36 2/36
5.0 3/36
5.5 2/36
6.0 1/36 1/36

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0

9.5
Compare…
Compare the distribution of X…

1 2 3 4 5 6 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0

…with the sampling distribution of .

As well, note that:

9.6
Generalize…
We can generalize the mean and variance of the sampling of
two dice:

…to n-dice:
The standard deviation of the
sampling distribution is
called the standard error:

9.7
Central Limit Theorem…
The sampling distribution of the mean of a random sample
drawn from any population is approximately normal for a
sufficiently large sample size.

The larger the sample size, the more closely the sampling
distribution of X will resemble a normal distribution.

9.8
Central Limit Theorem…
If the population is normal, then X is normally distributed
for all values of n.

If the population is non-normal, then X is approximately

normal only for larger values of n.

In most practical situations, a sample size of 30 may be

sufficiently large to allow us to use the normal distribution
as an approximation for the sampling distribution of X.

9.9
Sampling Distribution of the Sample Mean
1.

2.

3. If X is normal, X is normal. If X is nonnormal, X is

approximately normal for sufficiently large sample sizes.
Note: the definition of “sufficiently large” depends on the
extent of nonnormality of x (e.g. heavily skewed;
multimodal)

9.10
Sampling Distribution of the Sample Mean
We can express the sampling distribution of the mean simple
as

X−µ
Z=
σ/ n

9.11
Sampling Distribution of the Sample Mean
The summaries above assume that the population is infinitely
large. However if the population is finite the standard error is
σ N−n
σx =
n N −1

where N is the population size and

N−n
N −1

is the finite population correction factor.

9.12
Sampling Distribution of the Sample Mean
If the population size is large relative to the sample size the
finite population correction factor is close to 1 and can be
ignored.

We will treat any population that is at least 20 times larger

than the sample size as large.

In practice most applications involve populations that

qualify as large.

As a consequence the finite population correction factor is

usually omitted.
9.13
Example 9.1(a)…
The foreman of a bottling plant has observed that the
amount of soda in each “32-ounce” bottle is actually a
normally distributed random variable, with a mean of 32.2
ounces and a standard deviation of .3 ounce.

If a customer buys one bottle, what is the probability that

the bottle will contain more than 32 ounces?

9.14
 Example 9.1(a)…
We want to find P(X > 32), where X is normally distributed
and µ = 32.2 and σ =.3
 X − µ 32 − 32.2 
P(X > 32) = P >  = P( Z > − .67) = 1 − .2514 = .7486
 σ .3 

“there is about a 75% chance that a single bottle of soda

contains more than 32oz.”

9.15
Example 9.1(b)…
The foreman of a bottling plant has observed that the
amount of soda in each “32-ounce” bottle is actually a
normally distributed random variable, with a mean of 32.2
ounces and a standard deviation of .3 ounce.

If a customer buys a carton of four bottles, what is the

probability that the mean amount of the four bottles will
be greater than 32 ounces?

9.16
Example 9.1(b)…
We want to find P(X > 32), where X is normally distributed
With µ = 32.2 and σ =.3

Things we know:
1) X is normally distributed, therefore so will X.

2) = 32.2 oz.

3)

9.17
Example 9.1(b)…
If a customer buys a carton of four bottles, what is the
probability that the mean amount of the four bottles will be
greater than 32 ounces?

“There is about a 91% chance the mean of the four bottles

will exceed 32oz.”

9.18
Graphically Speaking…
mean=32.2

what is the probability that one bottle will what is the probability that the mean of
contain more than 32 ounces? four bottles will exceed 32 oz?

9.19
Chapter-Opening Example
Salaries of a Business School’s Graduates
In the advertisements for a large university, the dean of
the School of Business claims that the average salary
of the school’s graduates one year after graduation is
$800 per week with a standard deviation of $100.

A second-year student in the business school who has

just completed his statistics course would like to check
whether the claim about the mean is correct.

9.20
Chapter-Opening Example
Salaries of a Business School’s Graduates
He does a survey of 25 people who graduated one year ago
and determines their weekly salary.

He discovers the sample mean to be $750.

To interpret his finding he needs to calculate the probability

that a sample of 25 graduates would have a mean of $750 or
less when the population mean is $800 and the standard
deviation is $100.

After calculating the probability, he needs to draw some

conclusions.
9.21
Chapter-Opening Example
We want to find the probability that the sample mean is less
than $750. Thus, we seek

P( X < 750)
The distribution of X, the weekly income, is likely to be
positively skewed, but not sufficiently so to make the
distribution of X nonnormal. As a result, we may assume that X
is normal with mean
µ x = µ = 800

and standard deviation

σ x = σ / n = 100 / 25 = 20

9.22
Chapter-Opening Example
Thus,

P( X < 750)
 X − µx 750 − 800 
= P < 

 σ x 20 
= P( Z < − 2.5)
= .5 − .4938
= .0062
The probability of observing a sample mean as low as $750 when
the population mean is $800 is extremely small. Because this event
is quite unlikely, we would have to conclude that the dean's claim is
not justified.

9.23
Using the Sampling Distribution for Inference
Here’s another way of expressing the probability calculated from a
sampling distribution.
P(-1.96 < Z < 1.96) = .95
Substituting the formula for the sampling distribution

X−µ
P(−1.96 < < 1.96) = .95
σ/ n

With a little algebra

σ σ
P(µ − 1.96 < X < µ + 1.96 ) = .95
n n

9.24
Using the Sampling Distribution for Inference
Returning to the chapter-opening example where µ = 800, σ = 100,
and n = 25, we compute
100 100
P(800 − 1.96 < X < 800 + 1.96 ) = .95
25 25

or

P(760.8 < X < 839.2) = .95

This tells us that there is a 95% probability that a sample mean will
fall between 760.8 and 839.2. Because the sample mean was
computed to be $750, we would have to conclude that the dean's
claim is not supported by the statistic.
9.25
Using the Sampling Distribution for Inference
Changing the probability from .95 to .90 changes the probability
statement to
σ σ
P(µ − 1.645 < X < µ + 1.645 ) = .90
n n

9.26
Using the Sampling Distribution for Inference
We can also produce a general form of this statement

σ σ
P(µ − z α / 2 < X < µ + zα / 2 ) =1− α
n n
In this formula α (Greek letter alpha) is the probability that
does not fall into the interval.

To apply this formula all we need do is substitute the values for

µ, σ, n, and α.

9.27
Using the Sampling Distribution for Inference
For example, with µ = 800, σ = 100, n = 25 and α= .01, we
produce
σ σ
P(µ − z .005 < X < µ + z .005 ) = 1 − .01
n n

100 100
P(800 − 2.575 < X < 800 + 2.575 ) = .99
25 25

P(748.5 < X < 851.5) = .99

9.28
Sampling Distribution of a Proportion…
The estimator of a population proportion of successes is the
sample proportion. That is, we count the number of
successes in a sample and compute:

(read this as “p-hat”).

X is the number of successes, n is the sample size.

9.29
Normal Approximation to Binomial…
Binomial distribution with n=20 and p=.5 with a normal
approximation superimposed ( =10 and =2.24)

9.30
Normal Approximation to Binomial…
Binomial distribution with n=20 and p=.5 with a normal
approximation superimposed ( =10 and =2.24)

where did these values come from?!

From §7.6 we saw that:

Hence:
and
9.31
Normal Approximation to Binomial…
Normal approximation to the binomial works best when the
number of experiments, n, (sample size) is large, and the
probability of success, p, is close to 0.5

For the approximation to provide good results two

conditions should be met:
1) np ≥ 5
2) n(1–p) ≥ 5

9.32
Normal Approximation to Binomial…
To calculate P(X=10) using the
normal distribution, we can find
the area under the normal curve
between 9.5 & 10.5

P(X = 10) ≈ P(9.5 < Y < 10.5)

where Y is a normal random variable approximating

the binomial random variable X

9.33
Normal Approximation to Binomial…
In fact:
P(X = 10) = .176
while
P(9.5 < Y < 10.5) = .1742
the approximation is quite good.

P(X = 10) ≈ P(9.5 < Y < 10.5)

where Y is a normal random variable approximating

the binomial random variable X

9.34
Sampling Distribution of a Sample Proportion…
Using the laws of expected value and variance, we can
determine the mean, variance, and standard deviation of .
(The standard deviation of is called the standard error of
the proportion.)

Sample proportions can be standardized to a standard normal

distribution using this formulation:

9.35
Example 9.2
In the last election a state representative received 52% of the
votes cast.

One year after the election the representative organized a

survey that asked a random sample of 300 people whether
they would vote for him in the next election.

If we assume that his popularity has not changed what is the

probability that more than half of the sample would vote for
him?

9.36
Example 9.2
The number of respondents who would vote for the representative
is a binomial random variable with n = 300 and p = .52.

We want to determine the probability that the sample proportion is

greater than 50%. That is, we want to find

P(P̂ > .50)

We now know that the sample proportion P̂ is approximately

normally distributed with mean p = .52 and standard deviation

p(1 − p) / n = (.52)(1 − .52) / 300 = .0288

9.37
Example 9.2
Thus, we calculate

P(P̂ > .50)

 P̂ − p .50 − . 52 
= P > 
 p(1 − p) / n . 0288 
 
= P( Z > − .69)
= .7549

If we assume that the level of support remains at 52%, the

probability that more than half the sample of 300 people
would vote for the representative is 75.49%.
9.38
Sampling Distribution: Difference of two means
The final sampling distribution introduced is that of the
difference between two sample means. This requires:

 independent random samples be drawn from each of two

normal populations

If this condition is met, then the sampling distribution of the

difference between the two sample means, i.e.
will be normally distributed.
(note: if the two populations are not both normally
distributed, but the sample sizes are “large” (>30), the
distribution of is approximately normal)

9.39
Sampling Distribution: Difference of two means
The expected value and variance of the sampling
distribution of are given by:

mean:

standard deviation:

(also called the standard error if the difference between two

means)
9.40
Example 9.3…
Since the distribution of is normal and has a

mean of

and a standard deviation of

We can compute Z (standard normal random variable) in this

way:

9.41
Example 9.3…
Starting salaries for MBA grads at two universities are
normally distributed with the following means and standard
deviations. Samples from each school are taken…
University 1 University 2
Mean 62,000 $/yr 60,000 $/yr
Std. Dev. 14,500 $/yr 18,300 $/yr
sample size n 50 60

What is the probability that the sample mean starting salary of

University #1 graduates will exceed that of the #2 grads?

9.42
Example 9.3…
“What is the probability that the sample mean starting salary
of University #1 graduates will exceed that of the #2 grads?”

We are interested in determinging P(X1 > X2). Converting

this to a difference of means, what is: P(X1 – X2 > 0) ?

Z
“there is about a 74% chance that the sample mean
starting salary of U. #1 grads will exceed that of U. #2”
9.43
From Here to Inference
In Chapters 7 and 8 we introduced probability distributions,
which allowed us to make probability statements about
values of the random variable.

A prerequisite of this calculation is knowledge of the

distribution and the relevant parameters.

9.44
From Here to Inference
In Example 7.9, we needed to know that the probability that
Pat Statsdud guesses the correct answer is 20% (p = .2) and
that the number of correct answers (successes) in 10
questions (trials) is a binomial random variable.

We then could compute the probability of any number of

successes.

9.45
From Here to Inference
In Example 8.2, we needed to know that the return on
investment is normally distributed with a mean of 10% and a
standard deviation of 5%.

These three bits of information allowed us to calculate the

probability of various values of the random variable.

9.46
From Here to Inference
The figure below symbolically represents the use of
probability distributions.

Simply put, knowledge of the population and its

parameter(s) allows us to use the probability distribution to
make probability statements about individual members of the
population.

Probability Distribution ---------- Individual

9.47
From Here to Inference
In this chapter we developed the sampling distribution,
wherein knowledge of the parameter(s) and some
information about the distribution allow us to make
probability statements about a sample statistic.

Population Sampling distribution

----- Statistic
& Parameter ( s )

9.48
From Here to Inference
Statistical works by reversing the direction of the flow of
knowledge in the previous figure. The next figure displays
the character of statistical inference.

Starting in Chapter 10, we will assume that most population

parameters are unknown. The statistics practitioner will
sample from the population and compute the required
statistic. The sampling distribution of that statistic will
enable us to draw inferences about the parameter.

9.49
From Here to Inference

Sampling distribution
Statistic ------ Parameter

9.50