COMPLETE

BUSINESS
STATISTICS
by
AMIR D. ACZEL
&
JAYAVEL SOUNDERPANDIAN
7th edition.
Prepared by Lloyd Jaisingh, Morehead State
University

Chapter 16

Sampling Methods
McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

16-2

16 Sampling Methods

Using Statistics
Nonprobability Sampling and Bias
Stratified Random Sampling
Cluster Sampling
Systematic Sampling
Nonresponse

16-3

16 LEARNING OBJECTIVES
After studying this chapter you should be able to:
Apply nonprobability sampling methods
Decide when to conduct a stratified sampling method
Compute estimates from stratified sample results
Decide when to conduct a cluster sampling method

16-4

16 LEARNING OBJECTIVES (2)

After studying this chapter you should be able to:
Compute estimates from cluster sampling results
Decide when to conduct a systematic sampling method
Compute estimates from systematic sample results
Avoid nonresponse biases in estimates

16-2 Nonprobability Sampling and

Bias

Sampling methods that do not use samples with known

probabilities of selection are know as nonprobability sampling
methods.
methods
In nonprobability sampling methods, there is no objective way of
evaluating how far away from the population parameter the
estimate may be.
Frame - a list of people or things of interest from which a
random sample can be chosen.

16-5

16-6

16-3 Stratified Random Sampling

Instratified
stratifiedrandom
randomsampling,
sampling,
weassume
assumethat
thatthe
thepopulation
populationof
ofNNunits
unitsmay
may
sampling we
In
sampling
bedivided
dividedinto
intommgroups
groupswith
withNNiunits
unitsinineach
eachgroup
groupi=1,2,...,m.
i=1,2,...,m. The
Themmstrata
strata
be
i
arenonoverlapping
nonoverlappingand
andtogether
togetherthey
theymake
makeup
upthe
thetotal
totalpopulation:
population:NN1++NN2
are
1
2
+...+NNm=N.
=N.
+...+
m

Population

Stratum 1

N1

Stratum 2

N2

The m strata are

non-overlapping.
mm

N N
i
N i i N

Stratum m

Nm

i 1

16-7

16-3 Stratified Random Sampling

(Continued)

Instratified
stratifiedrandom
randomsampling,
sampling,
weassume
assumethat
thatthe
thepopulation
populationof
ofNNunits
unitsmay
may
sampling we
In
sampling
bedivided
dividedinto
intommgroups
groupswith
withNNiunits
unitsinineach
eachgroup
groupi=1,2,...,m.
i=1,2,...,m. The
Themmstrata
strata
be
i
arenonoverlapping
nonoverlappingand
andtogether
togetherthey
theymake
makeup
upthe
thetotal
totalpopulation:
population:NN1++NN2
are
1
2
+...+NNm=N.
=N.
+...+
m
Nii

nii

Population Distribution

Group

Group

Sample Distribution

proportionalallocation,
allocation,
therelative
relativefrequencies
frequenciesininthe
thesample
sample(n
(n/n)
arethe
thesame
same
allocation the
i/n)are
InInproportional
allocation
i
asthose
thoseininthe
thepopulation
population(N
(N/N)
i/N). .
as
i

Relationship Between the Population

and a Stratified Random Sample
NN i
Trueweight
weightof
ofstratum
stratumi i: W
: W i
True
i i NN

nni
Samplingfraction
fractionin
instratum
stratumi i: :f f i
Sampling
i i nn
Truemean
meanof
ofpopulation
population: :
True
Truemean
meanin
instratum
stratumi i: :
True
ii
22
True
variance
of
the
population
:

True variance of the population :

Truevariance
varianceof
ofstratum
stratumi i:
: 22
True
ii
Samplemean
meanin
instratum
stratumi i: :XX
Sample
ii
22
Sample
variance
in
stratum
i
:
s
Sample variance in stratum i : s i
i

Theestimator
estimatorof
ofthe
thepopulation
populationmean
meanin
instratified
stratifiedrandom
randomsampling
sampling::
The
mm
X

W XX
X st W
i11 ii ii
st i

16-8

Properties of the Stratified Estimator

of the Sample Mean
theestimator
estimatorofofthe
themean
meaninineach
eachstratum,
stratum, XXi, , isisunbiased
unbiased then
thenthe
thestratified
stratified
1.1. IfIfthe
i
estimator
of
the
mean,
X
,
is
an
unbiased
estimator
thepopulation
populationmean,
mean, . .
estimator of the mean, Xstst, is an unbiased estimator ofofthe
thesamples
samplesininthe
thedifferent
differentstrata
strataare
aredrawn
drawnindependently
independentlyofofeach
eachother,
other, then
thenthe
the
2.2. IfIfthe
varianceofofthe
thestratified
stratified estimator
estimatorofofthe
thepopulation
populationmean,
mean, XXst, , isisgiven
givenby:
by:
variance
st
mm 22
WWi VV((XX ))
VV((XXstst))==
i=1 i
ii
i=1
samplingininall
allstrata
strataisisrandom,
random, then
thenthe
thevariance
varianceofof XXst isisfurther
furtherequal
equalto:
to:
33. . IfIfsampling
st
2
mm 22 2 i i
WWi
(1(1 f f ))

VV((XXstst))==
i=1 i nn
i=1
ii
ii
Whenthe
thesampling
samplingfractions,
fractions, f f , , are
aresmall
smalland
andmay
maybe
beignored,
ignored, we
wehave:
have:
When
ii
2
mm 22 2 i i
WWi

VV((XXstst))==
i=1 i nn
i=1
ii

16-9

Properties of the Stratified Estimator

of the Sample Mean (continued)

NN i

thesample
sampleallocation
allocationisisproportional
proportional nn nn i for
then
4.4. IfIfthe
i i NN forallalli i , , then



1--ff mm

1
22 i

V
(
X
)
=
W

V ( X stst) = n
Wi i i
i=1
n i=1
whichreduces
reducestoto
which
1 mm

1
22 i

V
(
X
)
=
W

V ( X stst) = n
Wi i i
i=1
n i=1
whenthe
thesampling
samplingfraction
fractionisissmall.
small.
when
addition, ififthe
thepopulation
populationvariances
variancesininall
allstrata
strataare
areequal,
equal, then
then
InInaddition,
22

VV((XXstst))== n
n
whenthe
thesampling
samplingfraction
fractionisissmall.
small.
when

16-10

When the Population Variance is

Unknown
22 , is :
An
unbiased
estimator
of
the
population
variance
of
stratum
i,

An unbiased estimator of the population variance of stratum i, i , is :

i
(XXXX ))22
(
i
22
i
S
Si
datainini i nn 11
i data
ii
samplinginineach
eachstratum
stratumisisrandom
random: :
IfIfsampling
W S22

m Wi iS i
2
m
2
i (1(1 f f))
SS ((XX st))==
st
i=11 nn
i=

16-11

Confidence Interval for the Population

Mean in Stratified Sampling
(1--)100%
)100%confidence
confidenceinterval
intervalfor
forthe
thepopulation
populationmean,
mean,, ,using
usingstratified
stratified
AA(1
sampling: :
sampling
xx stzzss((XX st))
st

st
2

Whenthe
thesample
samplesizes
sizesare
aresmall,
small,and
andthe
thepopulation
populationvariances
variancesare
areunknown,
unknown,
When
usethe
thet t--value
valueininthe
theabove
aboveformula.
formula.
use
Theeffective
effectivedegrees
degreesof
offreedom
freedom: :
The
2

2 2
2
s
m
s
m
N ( N n ) ii
N (N n )
i i==11 i i i i i i nni
i

Effective
df
=
Effective df =
2
N ( N n )/n 2 s44
N i( N i n i)/n i s i
mm

i i
i i
i

i i11

((nni11))
i

16-12

16-13

Example 16-2
Population
Population
Group
Group
Diversifiedservice
servicecompanies
companies
1.1.Diversified
Commercialbanking
bankingcompanies
companies
2.2.Commercial
Financialservice
servicecompanies
companies
3.3.Financial
Retailingcompanies
companies
4.4.Retailing
Transportationcompanies
companies
5.5.Transportation
Utilities
6.6.Utilities

True
True
Weights
Weights
(W)i)
(W
i
0.20
0.20
0.20
0.20
0.30
0.30
0.10
0.10
0.10
0.10
0.10
0.10

Number
Number
Firms
ofofFirms
100
100
100
100
150
150
50
50
50
50
50
50
500
NN==500
1 f

Stratum
1
2
3
4
5
6

Mean
52.7
112.6
85.6
12.6
8.9
52.3

Variance
ni
Wi
97650
20
0.2
64300
20
0.2
76990
30
0.3
18320
10
0.1
9037
10
0.1
83500
10
0.1
Estimated Mean:
66.12
Estimated standard error of mean: 23.08

Wixi
10.54
22.52
25.68
1.26
0.89
5.23
532.582

2
W
si
i
n

156.240
102.880
184.776
14.656
7.230
66.800

Sample
Sample
Sizes
Sizes
20
20
20
20
30
30
10
10
10
10
10
10
100
nn==100

Sampling
Sampling
Fraction
Fraction
(f(fi)i)
0.20
0.20
0.20
0.20
0.30
0.30
0.10
0.10
0.10
0.10
0.10
0.10

95%Confdence
ConfdenceInterval:
Interval:
95%
xx st zz ss((XX st))
st

st
22

66.12
.12(1(1.96
.96)()(23
23.08
.08))
66
66.12
.1245
45.24
.24
66
20.88
.88,111
,111.36
.36]]
[[20

16-14

Example 16-2 Using the template

Observe that the computer gives a slightly more

precise interval than the hand computation on
the previous slide.

Stratified Sampling for the Population

Proportion
Stratifiedestimator
estimatorofofthe
thepopulation
populationproportion,
proportion, pp, ,
Stratified
mm

WWiPPi
PP
stst i
i 11 i i

Theapproximate
approximatevariance
varianceofofPPst, ,
The
st
m 2 PPiQQi
m
V(PPst)) WW2i i i
V(
st
i i11 i nni i
Whenthe
thefinite
finite--population
populationcorrection
correctionfactors,
factors, f fi, , must
mustbe
beconsidered:
considered:
When
i
m 2
PiQQi

1
m
P
i i
V(PPst)) 1 NN2 ((NN nn ))
V(
st
2i i11 i i i i i i ((NN 11))nni
2
N
i
N
ii
Whenproportional
proportionalallocation
allocationisisused:
used:
When
1 f f mm
1

WWi PPiQQi
V(PPst))

V(
st
i 11 i i i
nn i

16-15

Stratified Sampling for the Population

Proportion: Example 16-1 (Continued)
Group
Metropolitan
Nonmetropolitan

Number
Wi
ni fi
Interested
0.65 130 0.65
28
0.35
70 0.35
18
Estimated proportion:
Estimated standard error:

Wp
i i

90% confidence interval:[0.181,0.279]

90% Confdence Interval:

p z s( P )
st

st
2

0.23 (1.645)( 0.297 )

0.23 0.049
[ 0.181,0.279 ]

0.14
0.09
0.23

W
i pi qi
n
0.0005756
0.0003099
0.0008855
0.0297574

16-16

16-17

Stratified Sampling for the Population

Proportion:Example 16-1 (Continued) using
the Template

16-18

Rules for Constructing Strata

1. Preferably no more than 6 strata.
2. Choose strata so that Cum f(x) is approximately
constant for all strata (Cum f(x) is the cumulative
square root of the frequency of X, the
variable of interest).
Age
20-25
26-30
31-35
36-40
41-45

Frequency (fi)
1
16
25
4
9

f(x)
1
4
5
2
3

Cum f(x)
5
5
5

16-19

Optimum Allocation
Foroptimum
optimumallocation
allocationofofeffort
effortininstratified
stratifiedrandom
randomsampling,
sampling, minimize
minimizethe
the
For
costfor
foraagiven
givenvariance,
variance, ororminimize
minimizethe
thevariance
variancefor
foraagiven
givencost.
cost.
cost
TotalCost
Cost == Fixed
FixedCost
Cost ++ Variable
VariableCost
Cost
Total
CC== CC 0CC inn i
0
i i
(W ))/ / CC
nn i (W
i ii
i
i
i
i
Optimum
Allocation:

Optimum Allocation:

(W ))/ / CC
nn (W
ii ii
ii
thecost
costper
perunit
unitsampled
sampledisisthe
thesame
samefor
forall
allstrata
strata(C
(C ==c):
c):
IfIfthe
i
i
NeymanAllocation:
Allocation:
Neyman

(W ))
nn i (W
i
ii ii
(W ))
nn (W
ii ii

16-20

Optimum Allocation: An Example

ii

Wi i
W

ssii

11
22
33

0.4
0.4
0.5
0.5
0.1
0.1

11
22
33

CCii

44
99
16
16

Wss
W
i ii
i
W
s
Wi si ii
CC i
i

0.4
0.4
1.0
1.0
0.3
0.3
1.7
1.7

0.200
0.200
0.333
0.333
0.075
0.075
0.608
0.608

Optimum Neyman
Neyman
Optimum
Allocation Allocation
Allocation
Allocation

0.329
0.329
0.548
0.548
0.123
0.123

0.235
0.235
0.588
0.588
0.176
0.176

16-21

Optimum Allocation: An Example

using the Template

16-22

16-4 Cluster Sampling

Group

Population Distribution
Sample
Sample Distribution
Distribution

Instratified
stratifiedsampling
samplingaa
In
randomsample
sample(n
(n)i)isis
random
i
chosenfrom
fromeach
eachsegment
segment
chosen
ofthe
thepopulation
population(N
(N).i).
of
i

Incluster
clustersampling
sampling
In
observationsare
aredrawn
drawnfrom
from mm
observations
outof
ofM
Mareas
areasor
orclusters
clustersof
ofthe
the
out
population.
population.

Cluster Sampling: Estimating the

Population Mean
Clustersampling
samplingestimator
estimatorof
of::
Cluster
m
m

nni iXXi i

i i
11
X

X clcl mm

nni i

i i
11
Estimatorof
ofthe
thevariance
varianceof
ofthe
thesample
samplemean:
mean:
Estimator
mm

s
(
X
)

s ( X clcl)

22

where
where

M mm
M
2
2
Mmn
Mmn
mm

nn

i 1
nn == i 1m
m

ii

nn ((XX XX ))

i i
11

22
ii

ii

mm11

clcl

22

16-23

Cluster Sampling: Estimating the

Population Proportion
Clustersampling
samplingestimator
estimatorof
ofpp::
Cluster
mm
i
n

n
i
P

i i
i

PPclcl i 1mm
nni i

i i
11

Estimatorof
ofthe
thevariance
varianceof
ofthe
thesample
sampleproportion:
proportion:
Estimator
mm

22 (
22
n
P

P
)

ni i ( Pi i Pclcl)

2
M

m
i

1
ss2 ((PPclcl)) Mmn22 i 1 m 1
m1
Mmn

16-24

16-25

Cluster Sampling: Example 16-3

xi

ni

ni x i

xi-xcl

(xi-xcl)2

21
22
11
34
28
25
18
24
19
20
30
26
12
17
13
29
24
26
18
22

8
8
9
10
7
8
10
12
11
6
8
9
9
8
10
8
8
10
10
11

168
176
99
340
196
200
180
288
209
120
240
234
108
136
130
232
192
260
180
242

-0.8333
0.1667
-10.8333
12.1667
6.1667
3.1667
-3.8333
2.1667
-2.8333
-1.8333
8.1667
4.1667
-9.8333
-4.8333
-8.8333
7.1667
2.1667
4.1667
-3.8333
0.1667

0.694
0.028
117.361
148.028
38.028
10.028
14.694
4.694
8.028
3.361
66.694
17.361
96.694
23.361
78.028
51.361
4.694
17.361
14.694
0.028

xcl =

3930
21.83

s2(Xcl)=

2
2
M m ni ( X i X cl )

m1
Mmn 2
0.00118
0.00005
0.25269
0.39348
0.04953
0.01706
0.03906
0.01797
0.02582
0.00322
0.11346
0.03738
0.20819
0.03974
0.20741
0.08738
0.00799
0.04615
0.03906
0.00009

1.58691

95%Confdence
ConfdenceInterval:
Interval:
95%
xx zz ss((XX ))
clcl
clcl
22

21.83
.83(1(1.96
.96)()( 11.587
.587))
21
21.83
.8322.47
.47
21
[19.36
.36,24
,24.30
.30]]
[19

16-26

Cluster Sampling: Example 16-3 Using

the Template

Cluster Sampling: Using the Template

to Estimate Population Proportion

16-27

16-28

16-5 Systematic Sampling

Randomlyselect
selectan
anelement
elementout
outof
ofthe
thefirst
firstkkelements
elementsininthe
thepopulation,
population,and
and
Randomly
thenselect
selectevery
everykth
kthunit
unitafterwards
afterwardsuntil
untilwe
wehave
haveaasample
sampleof
ofnnelements.
elements.
then
m
Xi
Systematic sampling estimator of : X sy i1
n
Estimator of the variance of the sample mean : s2 ( X

N n 2
sy ) Nn S
When the mean is constant within each stratum of k elements but different between strata :
n
( X i X ik )2

s2 ( X sy ) N n i1
2(n 1)
Nn
When the population is linearly increasing or decreasing with respect to the variable of interest :
n
( X i 2 X ik X i2k )2

s2 ( X sy ) N n i1
6(n 1)
Nn

16-29

Systematic Sampling: Example 16-4

mm
XXii
i11
22 0.36
i
X

0
.
5
s
X sy
sy
0.5
s 0.36
n
n
N nn 2 2100
100

2
N

2
2 2100100
s
(
X
)

S
.3600.0034
.0034

s ( X sy
sy) Nn S ( 2100)(100) 00.36
( 2100)(100)
Nn
95%confidence
confidenceinterval
intervalfor
forthe
theaverage
averageprice
pricechange
changefor
forall
allstocks:
stocks:
AA95%
.96))ss ((XX sy))
XXsy
sy ((11.96
sy
.96)()( 00.0034
.0034))
00.5.5((11.96
.114
00.5.500.114
.386, 0, 0.614
.614]]
[[00.386

16-30

16-6 Nonresponse
Systematic nonresponse can bias estimates

Systematic nonresponse can bias estimates

Callbacksof
ofnonrespondents
nonrespondents
Callbacks
Offersof
ofmonetary
monetaryrewards
rewardsfor
fornonrespondents
nonrespondents
Offers
Random-responsemechanism
mechanism
Random-response