Sample-Size

Determination
By
Tuhin Chattopadhyay
Definitions and Symbols
Parameter: A parameter is a summary description of a fixed
characteristic or measure of the target population. A parameter
denotes the true value which would be obtained if a census
rather than a sample was undertaken.

Statistic: A statistic is a summary description of a
characteristic or measure of the sample. The sample statistic is
used as an estimate of the population parameter.
Symbols for Population and Sample Variables

Variable Population Sample

Mean



X

Proportion

[

p

Variance

o
2


s
2


Standard deviation

o

s

Size

N

n

Standard error of the mean

o
x


S
x


Standard error of the proportion

o
p


S
p


Standardized variate (z)

(X-)/o

(X-X)/S

Coefficient of variation (C)

o/

S/X

_
_
_
_
_
Definitions and Symbols
Precision level (Bound): When estimating a population
parameter by using a sample statistic, the precision level is
the desired size of the estimating interval. This is the
maximum permissible difference between the sample
statistic and the population parameter.

Confidence interval: The confidence interval is the range
into which the true population parameter will fall, assuming
a given level of confidence.

Confidence level: The confidence level is the probability
that a confidence interval will include the population
parameter.
A confidence interval or interval estimate is a range or interval of
numbers believed to include an unknown population parameter.
Associated with the interval is a measure of the confidence we have
that the interval does indeed contain the parameter of interest.0
Confidence Interval or Interval
Estimate
A confidence interval or interval estimate has two components:
A range or interval of values
An associated level of confidence
Critical Values of z and
Levels of Confidence
= tail area central area = 1 2 z

0.10 0.80 z
.10
= 1.28
0.05 0.90 z
.05
= 1.645
0.025 0.95 z
.025
= 1.96
0.01 0.98 z
.01
= 2.33
0.005 0.99 z
.005
= 2.58

0.99 0.005 2.576
0.98 0.010 2.326
0.95 0.025 1.960
0.90 0.050 1.645
0.80 0.100 1.282

( ) 1o
o
2
z
o
2
Critical Values of z and Levels of Confidence
5 4 3 2 1 0 - 1 - 2 - 3 - 4 - 5
0 . 4
0 . 3
0 . 2
0 . 1
0 . 0
Z
f
(
z
)

S t a n d a r d N o r m a l D i s t r i b u t i o n
z
o
2
( ) 1o
z
o
2
o
2
o
2
There is an 80% probability that any
normal variable will fall within 1.28
standard deviations of its mean. So we
say that 1.28 is the critical value of z that
corresponds to a central area of 0.80.
. is, That
not). will them of 5% (and mean population the include will
96 . 1
intervals such of 95% ely approximat sampling, after , Conversely
not). it will that 5% (and mean sample the include will
96 . 1
interval the ility that 0.95probab a is there sampling, Before

o
o
o

for interval confidence 95% a is

n
1.96 x

n
x
n
Confidence Interval for when
o is Known
Approximately 95% of sample means
can be expected to fall within the
interval .

Conversely, about 2.5% can be
expected to be above and
2.5% can be expected to be below
.

So 5% can be expected to fall outside
the interval .

o
+

(
196 196 . , .
n n

o
196 .
n

o
+196 .
n

o
+

(
196 196 . , .
n n
0 . 4
0 . 3
0 . 2
0 . 1
0 . 0
x
f
(
x
)

S a m p l i n g D i s t r i b u t i o n o f t h e M e a n

x
x
x
x
x
x
x
x
2.5%
95%
2.5%

o
196 .
n

o
+196 .
n
x
2.5% fall above
the interval
2.5% fall below
the interval
95% fall within
the interval
A 95% Interval around the
Population Mean
Approximately 95% of the intervals
around the sample mean can be
expected to include the actual value of the
population mean, . (When the sample
mean falls within the 95% interval around
the population mean.)

*5% of such intervals around the sample
mean can be expected not to include the
actual value of the population mean.
(When the sample mean falls outside the
95% interval around the population
mean.)
x x+1.96o x1.96o
n
x
o
96 . 1
95% Intervals around the Sample
Mean
0 . 4
0 . 3
0 . 2
0 . 1
0 . 0
x
f
(
x
)

S a m p l i n g D i s t r i b u t i o n o f t h e M e a n

x
x
x
x
x
x
x
x
2.5%
95%
2.5%

o
196 .
n

o
+196 .
n
x
x+1.96o x1.96o
*
*
A 95% confidence interval for when o is known and sampling is
done from a normal population, or a large sample is used, is:


x
n
196 .
o
The quantity is often called the margin of error or the
sampling error.
196 .
o
n
For example, if: n = 25
o = 20
= 122
| |
x
n
=
=
=
=
196 122 196
20
25
122 196 4
122 7 84
11416 12984
. .
( . )( )
.
. , .
o
A 95% confidence interval:
The 95% Confidence Interval for
x
When sampling from the same population, using a fixed sample size, the
higher the confidence level, the wider the confidence interval.
5 4 3 2 1 0 - 1 - 2 - 3 - 4 - 5
0 . 4
0 . 3
0 . 2
0 . 1
0 . 0
Z
f
(
z
)

S t a n d a r d N o r m a l D i s t r i b u t i o n
80% Confidence Interval:
x
n
128 .
o
5 4 3 2 1 0 - 1 - 2 - 3 - 4 - 5
0 . 4
0 . 3
0 . 2
0 . 1
0 . 0
Z
f
(
z
)

S t a n d a r d N o r m a l D i s t r i b u t i o n
95% Confidence Interval:
x
n
196 .
o
The Level of Confidence and the
Width of the Confidence Interval
The Sample Size and the Width of
the Confidence Interval
When sampling from the same population, using a fixed confidence
level, the larger the sample size, n, the narrower the confidence
interval.
0 . 9
0 . 8
0 . 7
0 . 6
0 . 5
0 . 4
0 . 3
0 . 2
0 . 1
0 . 0
x
f
(
x
)

S a m p l i n g D i s t r i b u t i o n o f t h e M e a n
95% Confidence Interval: n = 40
0 . 4
0 . 3
0 . 2
0 . 1
0 . 0
x
f
(
x
)

S a m p l i n g D i s t r i b u t i o n o f t h e M e a n
95% Confidence Interval: n = 20
Sample-Size Determination
How close do you want your sample estimate to be to the unknown
parameter? (What is the desired bound, B?)
What do you want the desired confidence level (1-o) to be so that the
distance between your estimate and the parameter is less than or equal
to B?
What is your estimate of the variance (or standard deviation) of the
population in question?
Before determining the necessary sample size, three questions must be
answered:
For example: A (1- ) Confidence Interval for : x z
2
o
o
o

n
}

Bound, B

Standard error
of statistic
Sample size = n
Sample size = 2n
Standard error
of statistic
The sample size determines the bound of a statistic, since the standard
error of a statistic shrinks as the sample size increases:
Sample Size and Standard Error
Minimum re quired sam ple size i n estimati ng the pop ulation
mean, :

Bound of e stimate:
B = z
2

o
o
o
o
n
z
B
n
=
2
2 2
2
Minimum re quired sam ple size i n estimati ng the pop ulation
proportion , p

$
n
z pq
B
=
o
2
2
2
Minimum Sample Size: Mean and
Proportion
Sample Size Determination for Means and Proportions
Steps Means Proportions

1. Specify the level of precision

B = Rs.5

B = p - [ = 0.05

2. Specify the confidence level (CL)

CL = 95%

CL = 95%

3. Determine the z value associated
with CL

z value is 1.96

z value is 1.96

4. Determine the standard deviation
of the population

Estimate o: o = 55

Estimate [: [ =
0.64

5. Determine the sample size using
the formula for the standard error

n = o
2
z
2
/B
2
= 465

n = [(1-[) z
2
/B
2
=
355


Sample Size for Estimating Multiple Parameters
Mean Household Monthly Expense On

Department store shopping Clothes Gifts

Confidence level

95%

95%

95%


z value

1.96

1.96

1.96


Precision level (B)


Rs. 5

Rs. 5

Rs. 4

Standard deviation of the
population (o)

Rs. 55

Rs. 40

Rs. 30

Required sample size (n)


465

246

217




A marketing research firm wants to conduct a survey to estimate the
average amount spent on shopping by each person visiting a retail store.
The people who plan the survey would like to determine the average
amount spent by all people visiting the store to within Rs. 120, with
95% confidence. From past operation of the resort, an estimate of the
population standard deviation is s = Rs. 400. What is the minimum
required sample size?
n
z
B
=
=
= ~
o
o
2
2 2
2
2 2
2
196 400
120
42 684 43
( . ) ( )
.
The manufacturers of a sports car want to estimate the
proportion of people in a given income bracket who are
interested in the model. The company wants to know the
population proportion, p, to within 0.01 with 99%
confidence. Current company records indicate that the
proportion p may be around 0.25. What is the minimum
required sample size for this survey?
n
z pq
B
=
=
= ~
o
2
2
2
2
2
2 576 025 0 75
010
124.42 125
. ( . )( . )
.