Transcript sampling distribution of sample means

Section 5.4
Sampling Distributions and
the Central Limit Theorem
Sampling Distributions

Definition 1: A sampling distribution is the
probability distribution of a sample statistic that is
formed when samples of size n are repeatedly
taken from a population. If the sample statistic is
the sample mean, then the distribution is the
sampling distribution of sample means.
Sampling Distributions

Properties of Sampling Distributions of Sample Means:

The mean of the sample means is equal to the population
mean µ.

The standard deviation of the same means is equal to the
population standard deviation divided by the square root of n.
The standard deviation of the sampling distribution of the
sample means is called the standard error of the mean.
The Central Limit Theorem

If samples of size n, where n ≥ 30, are drawn from any population with a
mean and a standard deviation , then the sampling distribution of sample
means approximates a normal distribution. The greater the sample size, the
better the approximation.

If the population itself is normally distributed, the sampling distribution of
sample means is normally distributed for any sample size n.

In either case, the sampling distribution of sample means has a mean equal
to the population mean.

The sampling distribution of sample means has a variance equal to 1/n times
the variance of the population and a standard deviation equal to the
population standard deviation divided by the square root of n.

The standard deviation of the sampling distribution of the sample means is
also called the standard error of the mean.
Example 1
Phone bills for residents of a city have a mean of $64
and a standard deviation of $9, as shown in the
following graph. Random samples of 36 phone bills
are drawn from this population, and the mean of
each sample is determined. Find the mean and the
standard error of the mean of the sampling
distribution. Then sketch a graph of the sampling
distribution of sample means.
Example 2
The heights of fully grown white oak trees are
normally distributed, with a mean of 90 feet and
standard deviation of 3.5 feet, as shown in the
following graph. Random samples of size 4 are
drawn from this population, and the mean of each
sample is determined. Find the mean and standard
error of the mean of the sampling distribution. Then
sketch the graph of the sampling distribution of
sample means.
Example 3

The mean room and board expense per year at a
four-year college is $5850. You randomly select 9
four-year colleges. What is the probability that the
mean room and board is less than $6180? Assume
that the room and board expenses are normally
distributed, with a standard deviation of $1125.

There is an 81.06% chance that a sample will have a
mean less than $6180.
Example 4

The average sales price of a single-family house in
the U.S. is $243,756. You randomly select 12 singlefamily houses. What is the probability that the
mean sales price is more than $200,000? Assume
that the sales prices are normally distributed with a
standard deviation of $44,000.

There is a 99.97% chance that a sample of homes will
have a mean price of more than $200,000.
Example 5

A bank auditor claims that credit card balances are normally distributed, with a
mean of $2870 and a standard deviation of $900.
 What is the probability that a randomly selected credit card holder has a credit
card balance less than $2500?
 The probability that a card holder’s balance is less than $2500 is 34.09%.

You randomly select 25 credit card holders. What is the probability that their
mean credit card balance is less than $2500?
 The probability that the mean credit card balance of 25 card holders is less
than $2500 is 1.97%.

Compare probabilities from (1) and (2) and interpret your answer in terms of the
auditor’s claim.
 Although there is a 34% chance that an individual will have a balance less
than $2500, there is only a 2% chance that the mean of a sample of 25 will
have a balance less than $2500. Because there is only a 2% chance that the
mean of a sample of 25 will have a balance less than $2500, this is a rare
occurrence. So, it is possible that the sample is unusual, or it is possible that
the auditor’s claim that the mean is $2870 is incorrect.
TOTD

A consumer price analyst claim that prices for
sound-system receivers are normally distributed,
with a mean of $625 and a standard deviation of
$150. (1) What is the probability that a randomly
selected receiver costs less than $700? (2) You
randomly select 10 receivers. What is the
probability that their mean cost is less than $700?
(3) Compare these two probabilities.