THE CENTRAL LIMIT

THEOREM
The World is Normal Theorem
Sampling Distribution of x- normally
distributed population
Sampling distribution of x: n=10

N( ,  /10)
/10

Population distribution:
N( , ) 
Normal Populations
Important Fact:
If the population is normally distributed, then the
sampling distribution of x is normally distributed for
any sample size n.
Non-normal Populations
What can we say about the shape of the sampling distribution
of x when the population from which the sample is selected is
not normal?

Population: interarrival times between

consecutive customers at an ATM
f(x)

0 time
The Central Limit Theorem
(for the sample mean x)
If a random sample of n observations is selected from
a population (any population), then when n is
sufficiently large, the sampling distribution of x will be
approximately normal.
(The larger the sample size, the better will be the normal
approximation to the sampling distribution of x.)
The Importance of the Central Limit
Theorem
When we select simple random samples of
size n, the sample means we find will vary
from sample to sample. We can model the
distribution of these sample means with a
probability model that is
  
N  , 
 n
How Large Should n Be?
For the purpose of applying the central limit theorem,
we will consider a sample size to be large when n > 30.
Summary
Population: mean ; stand dev. ; shape of
population dist. is unknown; value of  is
unknown; select random sample of size n;
Sampling distribution of x:
mean ; stand. dev. /n;
always true!
By the Central Limit Theorem:
the shape of the sampling distribution is approx
normal, that is
x ~ N(, /n)
 The Central Limit Theorem
(for the sample proportion p)
If a random sample of n observations is selected from
a population (any population), and x “successes” are
observed, then when n is sufficiently large, the
sampling distribution of the sample proportion p will
be approximately a normal distribution.
The Importance of the Central Limit
Theorem
When we select simple random samples of
size n, the sample proportions p that we obtain
will vary from sample to sample. We can
model the distribution of these sample
proportions with a probability model that is
 p (1  p ) 
N  p, 
 n 
How Large Should n Be?
For the purpose of applying the central limit theorem,
we will consider a sample size to be large when np > 10
and nq > 10
 Population Parameters and Sample
Statistics
The value of a population
Sample
Population statistic parameter is a fixed number,
Value
parameter used to it is NOT random; its value is
estimate
not known.
p The value of a sample
proportion of
population Unknown statistic is calculated from
with a certain p̂ sample data
characteristic
The value of a sample
µ
mean value
statistic will vary from
of a Unknown sample to sample (sampling
xpopulation
distributions)
variable
Example
A random sample of n=64 observations is
drawn from a population with mean  =15
and standard deviation  =4.
a. E ( X )    15; SD( X )  SD ( X )
n
 84  .5
b. The shape of the sampling distribution of
x is approx. normal (by the CLT) with
mean E(X)  15 and SD( X )  .5. The answer
depends on the sample size since SD( X )  SD ( X )
n
.
Graphically
Sampling distribution of x: n=64

N( ,  /n) = N(15, 4/8)

x = 4/64 = 4/8

Population distribution:
 = 15,  = 4 =4

= 15
Example (cont.)

c. x  15.5;
z  SDx ( X )  15.5.515  .5.5  1
This means that x =15.5 is one standard
deviation above the mean E ( X )  15
 Example 2
The probability distribution of 6-month incomes of
account executives has mean $20,000 and standard
deviation $5,000.
a) A single executive’s income is $20,000. Can it be
said that this executive’s income exceeds 50% of all
account executive incomes?
ANSWER No. P(X<$20,000)=? No information given
about distribution of X
 Example 2(cont.)
b) n=64 account executives are randomly selected.
What is the probability that the sample mean exceeds
$20,500?

answer E(x) = $20,000, SD(x) = $5,000

E( x )  $20,000, SD( x )  SD ( x )
n
 5,000
64
 625
By CLT,X ~ N (20,000,625)
P( X  20,500)  P  X 20,000
625  20,50020,000
625 
P( z  .8)  1  .7881  .2119

Example 3
A sample of size n=16 is drawn from a normally
distributed population with mean E(x)=20 and
SD(x)=8.

X ~ N (20,8); X ~ N (20, 8
16
)
a) P( X  24)  P( X 220  24220 )  P( z  2) 
1  .9772  .0228
b) P(16  X  24)  P  1620
2 z 2420
2 
P(2  z  2)  .9772  .0228  .9544
Example 3 (cont.)
c. Do we need the Central Limit Theorem to solve part
a or part b?

NO. We are given that the population is normal, so

the sampling distribution of the mean will also be
normal for any sample size n. The CLT is not needed.
 Example 4
Battery life X~N(20, 10). Guarantee: avg. battery life
in a case of 24 exceeds 16 hrs. Find the probability
that a randomly selected case meets the guarantee.

E(x )  20; SD(x )  10

24
 2.04. X ~ N(20,2.04)

P( X  16)  P( 2.04 
X 20 1620
2.04
)  P(z  1.96) 
.1.0250 .9750
Example 5
Cans of salmon are supposed to have a net weight of
6 oz. The canner says that the net weight is a
random variable with mean =6.05 oz. and stand.
dev. =.18 oz.
Suppose you take a random sample of 36 cans and
calculate the sample mean weight to be 5.97 oz.
Find the probability that the mean weight of the
sample is less than or equal to 5.97 oz.
Population X: amount of salmon in a can
E(x)=6.05 oz, SD(x) = .18 oz
 X sampling dist: E(x)=6.05 SD(x)=.18/6=.03
 By the CLT, X sampling dist is approx. normal
 P(X  5.97) = P(z  [5.97-6.05]/.03)
=P(z  -.08/.03)=P(z  -2.67)= .0038

 How could you use this answer?

Suppose you work for a “consumer watchdog”
group
If you sampled the weights of 36 cans and
obtained a sample mean x  5.97 oz., what
would you think?
Since P( x  5.97) = .0038, either
you observed a “rare” event (recall: 5.97 oz is 2.67
stand. dev. below the mean) and the mean fill
E(x) is in fact 6.05 oz. (the value claimed by the
canner)
the true mean fill is less than 6.05 oz., (the
canner is lying ).
Example 6
X: weekly income. E(x)=600, SD(x) = 100
n=25; X sampling dist: E(x)=600 SD(x)=100/5=20
P(X  550)=P(z  [550-600]/20)
=P(z  -50/20)=P(z  -2.50) = .0062

Suspicious of claim that average is $600; evidence is that

average income is less.
Example 7
 12% of students at NCSU are left-handed. What
is the probability that in a sample of 50
students, the sample proportion that are left-
handed is less than 11%?
.12*.88
E ( pˆ )  p  .12; SD( pˆ )   .046
50

By the CLT, pˆ ~ N (.12,.046)

 pˆ  .12 .11  .12 
P( pˆ  .11)  P   
 .046 .046 
 P( z  .22)  .4129