1 chapter 5 sampling distributions. 2 the distribution of a sample statistic examples take random...

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1 Chapter 5 Sampling Distributions

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Page 1: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Chapter 5 Sampling Distributions

Page 2: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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The Distribution of a Sample Statistic

Examples

Take random sample of students and compute average GPA in sample.

Ask 20 people whether or not they will vote NPA. Get number who say yes.

Get proportion of people in a SRS who favor the Olympics.

These statistics ( in bold face) are random variables. The results vary from sample to

sample

Probability distribution of a statistic is called its sampling distribution

Page 3: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Some important sampling distributions

Distribution of Sample average Sample count (number

of successes in sample)

Sample proportion (proportion of successes in sample)

Many others

Page 4: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Binomial setting for sample counts and proportions (Section 5.1)

Fixed number, n, of observations.

Only two outcomes for each observation – call them Success or Failure (S/F)

Observations are all independent.

Probability of success, p, is same for each trial._____________________

In the above setting can look at the prob. dist. of sample counts of successes and at the sample proportion of successes

Page 5: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Binomial Distribution

Let X be the number of successes in a binomial setting.

The probability distribution of X is called the binomial distribution with parameters n and p.

Page 6: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Binomial Formula

Loaded coin – each toss has prob 0.6 of coming up heads.

Toss 3 times.

Toss 10 times.

Page 7: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Binomial Example

Six customers enter a restaurant. With probability 0.75, any given customer purchases a meal. Purchase are independent of one another.

Analyze number of meals purchased.

Page 8: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Tables and Excel for Computing Binomial Probabilities

Table C (not in my text, but should be there) has binomial probabilities

Gives prob. of exactly k successes in n trials, for a given p.

Excel

BINOMDIST(6,20,0.4,FALSE) Prob. of exactly 6 successes in 20

trials with prob. of success 0.4 on each trial.

BINOMDIST(6,20,0.4,TRUE) Prob. of 6 or fewer successes in 20

trials with prob. of success 0.4 on each trial.

Midterms – use binomial formula and Excel formula.

HW – formula, table or Excel.

Page 9: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Example: 20% of govt. employees are dissatisfied with their wage. I take a SRS of 40 employees. What is the expected number and std. deviation of the number of dissatisfied employees in my sample?

Page 10: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Sample Proportion What about the proportion

of dissatisfied employees in my sample?

Called the sample proportion.

Its probability can be computed via binomial dist.

Also, sample proportion has Mean=p Std. Dev = SQRT[(p(1-p))/n].

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Normal Approximation for Counts and Proportions Computing binomial

probabilities when n is large. E.g Suppose 90% of

Canadians favor Liberal party! Gallup poll takes SRS of 1600 Canadians. How likely is it that at least 1460 of those sampled favor Liberals?

Approximately binomial but could spend forever computing this.

What to do???

Page 12: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Normal approximation for counts and proportions

Same thing for sample proportion. Distribution of sample proportion is approximately normal

with mean = p and std. dev = sqrt[p(1-p)/n]

Page 13: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Example of normal approximation to binomial

Consider our Gallup poll. Have p = .9, n = 1600. Recall that we want prob. that at least 1460 of the people in our sample favor Liberals.

We’ll also approximate prob. that at least 85% of people in our sample favor Liberals.

Page 14: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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The continuity correction

(optional) Improves the accuracy of normal

approximation to binomial. Can lead to substantially better

approximations, especially for smaller values of n.

Here it is:

Adjust P(a <X< b) by using P(a-0.5 < X <b+0.5),

Adjust P(X > a) by using P(X > a-0.5)

Adjust P(X<b) by using p(x<b+0.5)

Try it for our Gallup poll example. Try for situation when p = .5, n = 25.

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Review question on binomial (you do)

70% of all mortgage applicants are granted a loan.

5 people apply for a mortgage today. What is prob. exactly 3 get a loan?

Suppose 100 people apply for a mortgage each month. What is mean and std dev of #

who are granted loans? How likely is it that at least 75

of the 100 people are granted loans?

Find the 95th percentile of the number who are granted loans.

Hints For second part, use

normal approx to binomial

Mu = np

Sigma = sqrt[n*p*(1-p)]

Then it’s just a normal distribution question.

Page 16: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Sampling Distribution of a Sample MeanSection 5.2

Page 17: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Sample mean as a random variable

Suppose I want to estimate the mean annual return on TSE stocks over the past year.

I take a random sample of 20 stocks and get the average return for past year in the sample.

That’s my estimate of the true mean return for TSE

But different samples would give different estimates (results vary from sample to sample).

Thus the sample average ( also known as the sample mean) is a random variable.

Page 18: 1 Chapter 5 Sampling Distributions. 2 The Distribution of a Sample Statistic Examples  Take random sample of students and compute average GPA in sample

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Distribution of Sample Means

Sample averages are less variable than individual observations

Averages from big samples should be less variable than averages taken from small samples.

It turns out that the sample averages tend to follow a normal distribution (more on this later)

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Example:

I take a SRS of n= 36 people from a large population with mean 50 and std deviation 24.

What is the mean and standard deviation of the sampling distribution of xbar?

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Example – Sampling Dist. Of Sample Mean

The fills from a vending machine are normally distributed with a mean of 250 ml and a std. dev of 15 ml. I take a sample of n = 100 fills from the machine. How likely is it that the average fill from the 100 cups is between 247 and 253 ml.?

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Example – An Application of Central Limit Theorem: The distribution of the time

required to complete a certain task is highly skewed to the right. However, we know that the mean time required is 60 minutes, with a standard deviation of 30 minutes.

Consider a SRS of 225 people who complete the task. Estimate the probability that at the average time required for these people to complete the task lies between 57 and 63 minutes.

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Weighted sums and differences of normal variables are normally distributed Accountants incomes are

normally distributed with a mean of $100K and a standard deviation of 20K. Lawyers incomes are normally distributed with a mean of $80K and a standard deviation of 40K. Incomes of lawyers and accountants are independent.

I select an accountant and a lawyer at random. How likely is it that their combined income exceeds $220K? How likely is it that the accountant makes more than the lawyer?