CASE: St.

Stephens College1

St. Stephens College received 900 applications from prospective students. The application form contains a variety of information including the individuals Scholastic Aptitude Test (SAT) score and whether or not the individual desires to live on campus. The Director of Admissions would like to announce the average SAT score and the proportion of applicants that want to live on campus, for the population of 900 applicants. However, the necessary data on the applicants have not yet been entered in the colleges computerized database. So, the Director decides to estimate the values of the population parameters of interest based on sample statistics. The sample of 30 applicants is selected using simple random sampling technique in excel. From the colleges database of previous years, the director has some idea about the average SAT score and its variation of all applicants and percentage of applicants asking for campus accommodation. Database of previous years suggest: Population Mean SAT Score:

xii 1090 900

Population Standard Deviation for SAT Score

(x

2 )2 80 900
ii

Population Proportion Wanting On-Campus Housing:

648 .72 900

Questions: 1. What are the population parameters of interest or what numbers the director is looking for?

As the data for 900 applicants are not available, the parameters of interests need to ESTIMATED based on a randomly selected sample of 30 applicants? Some facts from the random sample of SAT score of 30 applicants are given below:
1

The sum of SAT score of 30 applicants is 32,910. The sum of squared deviation of SAT score from its mean is 163,996. 20 applicants out of 30 are looking for campus accommodation.

Data is sourced from Statistics for Business and Economics (11e) by Anderson et. al; Cengage Publication

Questions: 2. What are the good estimators of population parameters of interests? 3. Estimate those estimators. Suppose the director of the college decides that the sample mean of SAT score will be a good representation of population mean SAT score if sample mean derived from a sample of 30 applicants vary from the population mean by just 1% and the chance of this should no way be less than 70%. Staffs working on this are concerned about the accuracy of sample SAT score as the sample size is just 30. Questions: 4. Based on the sample of 30, can the staffs find out the chance of sample mean differing from population mean SAT score by +/-1%? 5. Does the probability value warrant a revisit of the random sample drawn? Suppose the team draws another random sample of size 100. The average SAT score does not change, but its standard deviation reduces and it is 8 now. Question: 6. Does the increase in sample size change the probability that the deviation between sample mean and population mean is +/-1%? 7. Does the value attain the limit set by the director? 8. Why did the probability value change? 9. Can you now find out the chance that the sample estimates of students asking for campus accommodation deviates from the true value by +/-5%?

CASE SOLUTION:

St Stephen's College-Sampling Dist.pptx