Sampling

The process of selecting a sample (representative

part) from a population is called SAMPLING

Population
Sample

Subset
 Basic Definitions
• Population: Total group under discussion or the group to which the
results will be generalized is called population
• Sample: It is a part of the population. The data is collected from the
selected units in the sample (respondents) in order to get estimates about
the population from which the sampling units are selected
• A parameter is a value that represent a certain population characteristic.
Population mean(μ), variance (σ2) proportion (P).
• Within a population, a parameter is a fixed value
• Parameter is usually unknown
Statistic: A statistic is a quantity that is calculated from a sample It is used to
give information about unknown values in the corresponding population
parameter i,.e guess value about population parameter
Sample mean (x), variance(S2), proportion (p^)
• Statistic is variable as it varies from sample to sample
 Parameter Vs Statistic

Population X1, X2, …, XN Sample x1, x2, …, xn

Population Mean Sample Mean

Parameter
Statistic
 Why Sample Survey?
• Lesser Cost and Time
• company may have only a limited budget for market testing
• market-research study must be completed within a certain amount
of time. Time limitations thus make it impossible to interview an
entire population.
• Greater Scope: one can get more information by taking a detailed
questionnaire
• Greater Accuracy Due to smaller work more trained persons can be
engaged for collection of data and better supervision and checks increase
the accuracy of estimates.
• To avoid physically damage of the sampling units. In some
instances sampling units get destroyed in the process of sampling.
The manufacturer is not going to ignite every match to demonstrate quality of his
produce because nothing would be left if he does so
 Statistical Methods

Statistical
Methods

Descriptive Inferential
Statistics Statistics

5
Descriptive Statistics consists of the tools and
techniques designed to describe data, such as
charts, graphs, and numerical measures like mean,
variance etc.

Inferential Statistics consists of techniques that

allow a decision-maker to reach a conclusion
about characteristics of a larger data set
(Population) based upon a subset (Sample) of
those data
 Inferential Statistics
Involves:
– Estimation Population?
– Hypothesis testing
Purpose
– Make Inferences
about Population
Characteristics

7
 Inference Process
Estimates Population
& tests

Sample
statistic
Sample

8
 Function of Hypothesis Testing
Hypothesis testing begins with an assumption, called a
hpothesis, that we make about a population parameter.
Say that we assume a certain value for a population
mean.
To test the validity of our assumption we
• Collect sample data
• Produce sample statistics
• Use this information to decide how likely it is that our
hypothesized population parameter is correct.
Now determine the difference between the hypothesized
value and the actual value of the sample mean.
9
 Function of Hypothesis Testing
Then we judge whether the difference is significant or
non-significant.
Unfortunately, the difference between the hypothesized
population parameter and the actual statistic is more often
neither so large that we automatically reject our
hypothesis nor so small that we just as quickly say don’t
reject it.
So in hypothesis testing, as in most significant real life
decisions, clear-cut solutions are the exception, not the
rule.

10
 Function of Hypothesis Testing
When to Reject the Hypothesis or Don’t Reject ?
Suppose I say that the average marks in FSC of the
students of UAF is at least 70 percent. How can you test
the validity of my hypothesis?
Using the sampling methods we could calculate the marks
of a sample of students. If we did this and the sample
statistic came out to be 85 percent, we would readily say
that “don’t reject the statement”.
However, if the sample statistic were 46 percent, we
would reject the statement.
We can interpret both these outcomes, 95 percent and 46
percent, using our common sense.
11
The Basic Problem ?

Now suppose that our sample statistic reveals a mark of

68 percent. This value is relatively close to 70 percent,but
is it close enough for us to don’t reject the hypothesis?
Whether we don’t reject or reject the hypothesis, we can’t
be absolutely certain that our decision is correct;
therefore, we will have to learn to deal with uncertainty in
our decision making.
12
 Hypothesis Testing

A procedure which enables us to decide on the basis of

information obtained from the sample taken from the
population whether to reject or don’t reject any specified
statement or hypothesis regarding the value of the
population parameter in a statistical problem is known as
testing of hypothesis.

13
 STEPS FOR TEST OF HYPOTHESIS

1):-Construction of hypotheses
2):- Level of significance
3):- Test statistic
4):-Decision rule
5):-Conclusion

14
 1/5 Construction of hypotheses
[Null and Alternative Hypotheses]
A Statistical Hypothesis is an assumption made about the
population parameter which may or may not be true.

The null hypothesis, denoted H0, is any hypothesis which is

to be tested for possible rejection or nullification under the
assumption that it is true. The null hypothesis always
contains some form of an equality sign.
The alternative hypothesis, denoted H1, The complement of
the null hypothesis is called the alternative hypothesis. It
is denoted by H1. The alternative hypothesis never
contains the sign of equality and is always in an inequality
form.
15
1/5 Construction of hypotheses
[One sided and two sided hypothesis]

One-Sided, Greater Than ( Right Tail)

H0: m  50 H1: m > 50

One-Sided, Less Than (Left Tail)

H0: m  50 H1: m < 50

Two-Sided, Not Equal To

H0: m = 50 H1: m  50
16
 1/5 Construction of hypotheses
[Null and Alternative Hypotheses]
Example:
A major west coast city provides one of the most comprehensive
emergency medical services in the world. Operating in a
multiple hospital system with approximately 20 mobile medical
units, the service goal is to respond to medical emergencies with
a mean time of 12 minutes or less.
The director of medical services wants to
formulate a hypothesis test that could use a sample of
emergency response times to determine whether or not the
service goal of 12 minutes is being achieved.

17
 1/5 Construction of hypotheses
[Construction of Hypotheses]
• Null and Alternative Hypotheses
Hypotheses Conclusion and Action
H0: m  The emergency service is meeting
the response goal; no follow-up
action is necessary.
H1: m The emergency service is not
meeting the response goal;
appropriate follow-up action is
necessary.
Where: m = mean response time for the population
of medical emergency requests.
 2/5 Level of significance
[Type I and Type II errors]
Whenever sample evidence is used to draw a conclusion
about population, there are risks of making wrong decision
because of sampling. Such errors in making the incorrect
conclusion are called Inferential Errors, because they
entail drawing an incorrect inference from the sample
about the value of the population parameter.
One the basis of sample information, we may reject a true
statement about population or don’t reject a false
statement
Type I error = Reject H0 / H0 is true
Type II error = Don’t Reject H0 / H0 is fasle
19
 2/5 Level of significance
[Type I and Type II errors]
State of Nature

Decision on the H0 True H0 False

basis of sample
information
Reject H0 Type I Correct
Error Decision
Do not Reject H0 Correct Type II
Decision Error

P(Type I error)=α P(Type II error)=β

α and β are inversely related to each other

1- α = level of confidence 1- β= Power of the test 20
 2/5 Level of significance
[Type I and Type II errors]
• Significance Level
Probability of committing a Type-I error is called the level of
significance, denoted by α . The level of significance is also called
the size of test. By α =5% we mean that there are 5 chances in 100 of
incorrectly rejecting a true null hypothesis. To put it in another way
we say that we are 95% confident in making the correct decision.
• Level of Confidence
The probability of not committing a Type-I error, (1- α ), is called
the level of confidence, or confidence co-efficient.
• Power of a Test
The probability of not committing a Type-II error, (1-β), is called the
power of the test.
21
 3/5 Test Statistic
• A statistic on which the decision of rejecting or
don’t rejecting the null hypothesis is based is
called a test statistic
• In testing of hypothesis the sampling
distribution of the test statistic is based on the
assumption that the null hypothesis is true.
Calculated value of Test statistic is amount of
evidence calculated from sample data against
null hypothesis. In case of sufficient evidence
against Ho, we’ll reject null hypothesis 22
4/5 Decision Rule Critical Value

• Critical region/Rejection region

Critical region is that part of the sampling
distribution of a statistic for which the Ho is
rejected. A null hypothesis is rejected if the
value of test- statistic is not consistent with the
Ho. CR is associated with H1. AR RR
• Non-rejection Region
Non-rejection region is that part of the sampling
distribution of a statistic for which the Ho is not
rejected.
Critical Values:
The values that separate Rejection and Non-
rejection regions are called Critical values
23
 5/5 Conclusion
Two approaches:
a. Critical value approach( Table values)
Reject Ho
if the calculated value of test statistic falls in
the rejection region otherwise don’t reject Ho
b. p-value (Probability value) approach
Reject Ho
If p-value ≤ Level of significance (α)
24
 Example:- (Data File:Coffee.mtw)

The Federal Trade Commission (FTC) periodically conducts

statistical studies designed to test the claims that
manufacturers make about their products. For example,
the label on a large can of Hilltop Coffee states that the
can contains 3 pounds of coffee. The FTC knows that
Hilltop’s production process cannot place exactly 3 pounds
of coffee in each can. However, as long as the population
mean filling weight is at least 3 pounds per can, the rights
of consumers will be protected. To test Hilltop’s claim a
random sample of 36 cans of coffee from recent
production of large number of cans is selected by FTC and
weight of coffee in pounds for each cans is recorded. Can
Hilltop be charged for label violation
 Solution:
Construction of hypotheses
Ho : m  3 (Hilltop’s claim is correct)
H1: m < 3 ( Hilltop’s claim is not correct)

MiniTab output
Test of mu = 3 vs < 3

95% Upper
Variable N Mean StDev SE Mean Bound T P
weight 36 2.9200 0.0956 0.0159 2.9469 -5.02 0.000

p-value does not provide much support for the null hypothesis, but
is it small enough to cause us to reject H0. we find sufficient
statistical evidence to reject the null hypothesis at the .01 level of
significance.
 Example:- (Data File:Rating.mtw)

A business travel magazine wants to classify transatlantic

gateway airports according to the mean rating for the
population of business travelers. A rating scale with a low
score of 0 and a high score of 10 will be used, and airports
with a population mean rating greater than 7 will be
designated as superior service airports. The magazine staff
surveyed a sample of 60 business travelers and obtained
ratings from each traveler. Do the data indicate that
Heathrow should be designated as a superior service
airport?
 Solution:
Construction of hypotheses
Ho : m ≤ 7 (Heathrow should not be designated as a superior service airport)
H1: m > 7 (Heathrow should be designated as a superior service airport)

MiniTab output
One-Sample T: rating
Test of mu = 7 vs > 7
95% Lower
Variable N Mean StDev SE Mean Bound T P
rating 60 7.283 1.195 0.154 7.026 1.84 0.036

p-value does not provide much support for the null hypothesis, but
is it small enough to cause us to reject H0. we find sufficient
statistical evidence to reject the null hypothesis at the .05 level of
significance and conclude that Heathrow should be classified as a
superior service airport
 Example(Data file:- GolfDistance.mtw)
The U.S. Golf Association (USGA) establishes rules that a
manufacturers of golf equipment must meet if their products are to
be acceptable for use in USGA events. MaxFlight uses a high-
technology manufacturing process to produce golf balls with a
mean driving distance of 275 yards. Sometimes, however, the
process gets out of adjustment and produces golf balls with a mean
driving distance different from 275 yards. When the mean distance
falls below 275 yards, the company worries about losing sales
because the golf balls do not provide as much distance as
advertised. When the mean distance passes 275 yards, MaxFlight’s
golf balls may be rejected by the USGA for exceeding the overall
distance standard concerning carry and roll. MaxFlight’s quality
control program involves taking periodic samples of 50 golf balls to
monitor the manufacturing process. For each sample, a hypothesis
test is conducted to determine whether the process has fallen out
of adjustment.
 Solution:
Construction of hypotheses
Ho : m = 275 (process is functioning correctly i.e no need for adjustment)
H1: m ≠ 275 (process requires adjustment)

MiniTab output
One-Sample T: distance
Test of mu = 275 vs not = 275
Variable N Mean StDev SE Mean 95% CI T P
distance 50 277.08 11.96 1.69 (273.68, 280.48) 1.23 0.225

p-value does provide much support for the null hypothesis and is
large enough to cause us not to reject H0. we do not find sufficient
statistical evidence to reject the null hypothesis at the .05 level of
significance and conclude that no action will be taken to adjust the
MaxFlight manufacturing process.
 EXAMPLE:- It has been found from experience that the mean
breaking strength of a particular brand of thread is 9.63N with
a standard deviation of 1.40N. Recently a sample of 36 pieces
of thread showed a mean breaking strength of 8.93N. Can we
conclude that the thread has become inferior? Use 5% level
Construction of hypotheses
POPULATION
Ho : m  9.63(Thread has not become inferior)
σ=1.40 H1 : m < 9.63(Thread has become inferior)
m < 9.63 MiniTab output
m  9.63 One-Sample Z
Test of mu = 9.63 vs < 9.63 The assumed standard deviation = 1.4
95% Upper
N Mean SE Mean Bound Z P
36 8.930 0.233 9.314 -3.00 0.001
SAMPLE
n=36 p-value does not provide much support for the null hypothesis and is
¯X=8.93 small enough to cause us to reject H0. we find sufficient statistical
evidence to reject the null hypothesis at the .05 level of significance
31
and conclude that thread has become inferior.
 EXAMPLE:-The mean lifetime of bulbs produced by a company has in
past been 1120 hours. A sample of 9 electric light bulbs recently
chosen from a supply of newly produced battery showed a mean
lifetime of 1170 hours with a standard deviation of 120 hours. Test
that mean lifetime of the bulbs has not changed. Use 5%
level of significance
Construction of hypotheses
POPULATION
Ho : m =1120(Mean lifetime of bulbs has not changed)
H1 : m ≠1120(Mean lifetime of bulbs has changed)
m =1120 MiniTab output
m ≠ 1120 One-Sample T
Test of mu = 1120 vs not = 1120
N Mean StDev SE Mean 95% CI T P
9 1170.0 120.0 40.0 (1077.8, 1262.2) 1.25 0.247

SAMPLE
n=9 p-value does provide much support for the null hypothesis and is
¯X=1170 large enough to cause us not to reject H0. we do not find sufficient
S=120 statistical evidence to reject the null hypothesis at the .05 level of
significance and conclude that mean life time of the bulbs has not 32

changed.
Test of Hypothesis
for testing two
Population Means
 Z
X  X 2   m1  m 2 
Population variances Yes
1

 1   2 
 2 2

are Known  n1 n 2 
 

NO
tp 
X 1  X 2   m1  m 2 
Population variances are equal Yes 1 1
S p  n1  n2 
2
(By using F-test)
No

t 
X 1  X 2   m1  m 2 
 2 2

 S1  S 2 
 n1 n2 
 
 Example(Data file:- SoftwareTest.mtw)
A new computer software package developed to help systems
analysts reduce the time required to design, develop, and implement
an information system. To evaluate the benefits of the new software
package, a random sample of 24 systems analysts is selected. Each
analyst is given specifications for a hypothetical information
system. Then 12 of the analysts are instructed to produce the
information system by using current technology. The other 12
analysts are trained in the use of the new software package and then
instructed to use it to produce the information system. The time
required to complete the information system project by using both
systems is recorded. The researcher in-charge of the new software
evaluation project hopes to show that the new software package will
provide a shorter mean project completion time.
Construction of hypotheses
Ho : m1 ≤ m2 (New system does not require shorter mean time than current system)
H1: m1 > m2 (New system requires shorter mean time than current system)
MiniTab output
Test for equality of two population variances
Null hypothesis Variance(current) / Variance(new) = 1 Ratio of variances = 0.826
Method DF1 DF2 Statistic P-Value
F Test (normal) 11 11 0.83 0.757 (p-value > 0.05, Don’t reject hypothesis of equal
population variances i.e population variances are equal)
Two-Sample T-Test for equality of two population means( equal population variances)
SE
N Mean StDev Mean
current 12 325.0 40.0 12
new 12 288.0 44.0 13
Difference = mu (current) - mu (new)
T-Test of difference = 0 (vs >): T-Value = 2.16 P-Value = 0.021 DF = 22

As p-value < 0.05(Level of significance) so reject Ho and conclude that new

system requires shorter mean time in developing projects as compare to
current system
 Example(Data file:-Airport.mtw)
The International Air Transport Association surveys business
travelers to develop quality ratings for transatlantic gateway
airports. The maximum possible rating is 10. Suppose a simple
random sample of 50 business travelers is selected and each
traveler is asked to provide a rating for the Miami International
Airport and 50 other business travelers were asked to rate the Los
Angeles airport. The ratings obtained from the samples of business
travelers follow. On the basis of ratings provided by business
travelers, can we declare Los Angeles airport as superior airport
than Miami.
µ1=Mean rating of Miami airport by population of business traveler at Miami airport
µ2=Mean rating of Los Angeles airport by population of business traveler at Log Angeles
airport
Construction of hypotheses
Ho : m1 m2 (Los Angeles airport is not superior to Miami airport)
H1: m1 < m2 (Los Angeles airport is superior to Miami airport)
MiniTab output
Test for equality of two population variances
Null hypothesis Variance(current) / Variance(new) = 1 Ratio of variances = 0.83
Method DF1 DF2 Statistic P-Value
F Test (normal) 49 49 0.83 0.517 (p-value > 0.05, Don’t reject hypothesis of equal
population variances i.e population variances are equal)
Two-Sample T-Test for equality of two population means( equal population variances)

N Mean StDev SE Mean

Miami 50 6.34 2.16 0.31
Los Angeles 50 6.72 2.37 0.34
Difference = mu (Miami) - mu (Los Angeles)
T-Test of difference = 0 (vs <): T-Value = -0.84 P-Value = 0.202 DF = 98
Both use Pooled StDev = 2.2707

As p-value > 0.05(Level of significance) so don’t reject Ho and conclude that

Los Angeles airport can not be declare superior to Miami airport
 Example(Data file:-union.mtw)

Suppose selected independent random samples of 15

women and 20 men in manufacturing and provide the
following hourly wage rates. Does there appear to be any
difference in the mean wage rate for these two groups
µ1=Mean hourly wage rate for population of women
µ2=Mean hourly wage rate for population of men
Construction of hypotheses
Ho : m1 = m2 (Mean hourly salary is same for both groups)
H1: m1 ≠ m2 (Mean hourly salary is different for both groups)
MiniTab output
Test for equality of two population variances
Null hypothesis Variance(current) / Variance(new) = 1 Ratio of variances = 3.37
Method DF1 DF2 Statistic P-Value
F Test (normal) 14 41 3.35 0.015 (p-value < 0.05, reject hypothesis of equal
population variances i.e population variances are not equal)
Two-Sample T-Test for equality of two population means( unequal population variances)

N Mean StDev SE Mean

union 15 17.54 3.66 0.94
non-union 20 15.37 1.99 0.45
Difference = mu (union) - mu (non-union)
T-Test of difference = 0 (vs not =): T-Value = 2.08 P-Value = 0.051 DF = 20

As p-value > 0.05(Level of significance) so don’t reject Ho and conclude that

mean hourly wage for both groups are same
EXAMPLE: The average salary of 50 workers from Masood textile is Rs.7,000
with a standard deviation of Rs 500 and average salary of 70 workers form
Shahzad textile is 6,800 with a standard deviation of Rs.300 . On the basis of
above sample information can we conclude that Masood textile is paying more
to workers than Shahzad Textile. Use 5% level of significance
m1=Average salary of all workers from Masood textile
m2=Average salary of all workers from Shahzad textile
POPULATION

m1 > m2
m1  m2
Construction of hypotheses
Ho : m1  m2
H1: m1 > m2
SAMPLE
n1=50 n2=70
¯X1=7000 ¯X2=6800
S1=500 S2=300
41
Construction of hypotheses
Ho : m1 ≤ m2 (Masood textile is not paying more than Shahzad textile))
H1: m1 > m2 (Masood textile is paying more than Shahzad textile)
MiniTab output
Test for equality of two population variances
Null hypothesis Variance(current) / Variance(new) = 1 Ratio of variances = 3.37
Method DF1 DF2 Statistic P-Value
F Test (normal) 49 69 2.78 0.000 (p-value < 0.05, reject hypothesis of equal
population variances i.e population variances are not equal)
Two-Sample T-Test for equality of two population means( unequal population variances)

SE
Sample N Mean StDev Mean
1 50 7000 500 71
2 70 6800 300 36
Difference = mu (1) - mu (2)
T-Test of difference = 0 (vs >): T-Value = 2.52 P-Value = 0.007 DF = 73

As p-value < 0.05(Level of significance) so reject Ho and conclude that average

salary of workers from Masood textile is more than average salary of workers
from Shahzad textile
EXAMPLE: A new chemical fertilizer, nitro plus, yielded 20,400 pounds of
tomatoes on the average on 40 randomly selected acres of farmland. On
another 100 randomly selected acres the standard organic fertilizer produced
a mean yield of 19,000 pounds. Do the results of the comparison indicate
that the chemical fertilizer really produces larger yields than the organic?
Assume that the population standard deviations are known to be 1200 and
1000 respectively.
POPULATION
m1=Average yield by using chemical fertilizer
=1000 = 1200
m2=Average yield by using standard organic fertilizer
m1 > m2
m1  m2
Construction of hypotheses
Ho : m1  m2
H1: m1 > m2
SAMPLE
n1=40 n2=100
¯X1=20400 ¯X2=19000
43
EXAMPLE: Data File (Battries)
The Acmy company has developed a new battery. The engineer in charge claims that
the new battery will operate continuously for atleast 7 minutes longer than the old
battery.
To test the claim, the company selects a simple random sample 0f 100 new and old
batteries and record the number of minutes of running time of each battery. Test the
engineer’s claim
m1=Average life of new batteries
POPULATION
m2=Average life of old batteries
m1 - m2 ≥ 7
Construction of hypotheses
Ho : m1 - m2 ≥ 7
H1: m1 - m2 < 7

SAMPLE
n1=100 n2=100
44
EXAMPLE: Data File (HopPlants)
An experiment was performed with seven hop plants. One half of each plant was
pollinated and the other half was not pollinated. The yield of seed of each hop plant is
recorded.
Test whether the pollinated half of the plant gives a higher average yield of seed than
the non-pollinated half.

m1=Average yield of pollinated half

POPULATION
m2=Average yield of non-pollinated half
m1 > m2
Construction of hypotheses
Ho : m1 - m2 ≤ 0
H1: m1 - m2 > 0

SAMPLE
n1=7 n2=7
45