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Stab22 Lecture8

The document discusses continuous random variables and their probability distributions, emphasizing the use of density curves to represent these distributions. It highlights the Normal approximation for counts and proportions, the Central Limit Theorem, and the behavior of sample means, illustrating these concepts with various examples. Additionally, it covers the properties of sample means and their distributions, including how they relate to underlying populations.

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3 views21 pages

Stab22 Lecture8

The document discusses continuous random variables and their probability distributions, emphasizing the use of density curves to represent these distributions. It highlights the Normal approximation for counts and proportions, the Central Limit Theorem, and the behavior of sample means, illustrating these concepts with various examples. Additionally, it covers the properties of sample means and their distributions, including how they relate to underlying populations.

Uploaded by

amber.hafeez2k
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Lecture 8

Continuous Random Variables


Example: The random number generator will spread its output uniformly across the entire
interval from 0 to 1 as we allow it to generate a long sequence of numbers. The results of
many trials are represented by the density curve of a uniform distribution.
 A continuous random variable X takes all values in an interval of numbers.

 The probability distribution of X is described by a density curve.

 The probability of any event is the area under the density curve and above the values
of X that make up the event.
Normal Distributions
Let's look at the examples from the previous lecture:
Example: binomial distribution, n = 500, p = 0.4

Example: A sample survey asks a nationwide random sample of 2500 adults if


they agree or disagree that «I like buying new clothes, but shopping is often frustrating
and time-consuming». Suppose that 60% of all adults would agree if asked this question.
Figure below is a probability histogram of the exact distribution of the proportion of
frustrated shoppers ̂ , based on the binomial distribution with n = 2500, p = 0.6.

The histogram looks very Normal.


Normal Approximation for Counts and Proportions:
Draw an SRS of size n from a large population having population proportion p of
successes.
Let X be the count of successes in the sample and ̂ be the sample proportion of
successes.
When n is large, the sampling distributions of these statistics are approximately Normal:

X is approximately √ ))

)
̂ is approximately √ )

As a rule of thumb, we will use this approximation for values of n and p that satisfy
and ) .
Example: Let's compare the Normal approximation with the exact calculation.
), ̂ ) (software)
Example: The audit described in the example from the previous lecture
examined an SRS of 150 sales records for compliance with sales tax laws. In fact, 8% of
all the company's sales records have an incorrect sales tax classification. The count X of
bad records in the sample has approximately the Bin(150, 0.08) distribution.
) (software)
Continuity Correction
Figure below illustrates an idea that greatly improves the accuracy of the Normal
approximation to binomial probabilities.
Sampling Distribution of Sample Mean
Sample means are among the most common statistics, and we are often interested in their
sampling distribution.
The figure below shows (a) the distribution of lengths of all customer service calls
received by a bank in a month ( ); (b) the distribution of the sample means ̅ for
500 random samples of size 80 from this population.
Facts about sample means:

 Sample means are less variable than individual observations.

 Sample means are more Normal than individual observations.

Mean and Standard Deviation of ̅


The sample mean ̅ from a sample or an experiment is an estimate of the mean of the
underlying population.
Let be taken from a population with mean and standard deviation .
We say, ~ i.i.d. with mean and st. deviation .
i.i.d. = independent identically distributed

̅ ∑
Then
̅

̅
√
Why?
Central Limit Theorem (CLT)
We have described the center and spread of the probability distribution of ̅ . What about
its shape?
It can be shown that if we have a population from
)
then the distribution of sample mean of n independent observations is

)
√
Moreover,

CLT: Draw an SRS of size n from any population with mean and finite standard
deviation . When n is large enough, the sampling distribution of the sample mean is
approximately ).
√
Example: Let's look at the histogram of the lengths of telephone calls again. For that
example, and seconds. Consider a sample of size 80.

How close will the sample mean be to the population mean?


How can we reduce the standard deviation?
Figure below shows the CLT in action for another very non-Normal population: (a)
displays the density curve of a single observation, that is, of the population. The
distribution is strongly right-skewed, and the most probable outcomes are near 0. The
mean of this distribution is 1, and its standard deviation is also 1. This particular
continuous distribution is called an exponential distribution.
Figures (b), (c), and (d) are the density curves of the sample means of 2, 10, and 25
observations from this population.
Example: The time X that a technician requires to perform preventive maintenance on an
air-conditioning unit is governed by the exponential distribution.

The mean time is hour and the standard deviation is hour. Your company
operates 70 of these units. What is the probability that their average maintenance time
exceeds 50 minutes?
Let ̅ = sample mean time spent working on 70 units.
Actual probability = 0.9294
A few more facts:

 The Normal approximation for sample proportions and counts is an example of the
CLT.
Why?

 Any linear combination of independent Normal random variables is also Normally


distributed.
Example: Tom and George are playing in the club golf tournament.
Their scores vary as they play the course repeatedly.

Tom's score X has N(110, 10) distribution

George's score Y varies from round to round according to N(100, 8)


distribution.

If they play independently, what is the probability that Tom will score lower than George
and thus do better in the tournament?

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