Business Statistics

Business Statistics
Sampling and Sampling Distributions

• Learn the reasons for sampling
• Develop an understanding about different sampling

methods
• Distinguish between probability & non probability

sampling
• Discuss the relative advantages & disadvantages of each

sampling methods
Sampling
A population can be defined as including all people or items
with the characteristic one wishes to understand.
Sample: Sample is a unit selected from a population
Represents the whole population
Purpose to draw the inference
Sampling: is the process of selecting observations (a sample) to
provide adequate description and inferences of the population
Why Sample?
Cost and time
Practical impossibility
Accuracy
The sampling frame is the list from which the potential
respondents are drawn.
The sampling frame must be representative of the population.
The population from which the sample is drawn may not be

the same as the population about which we actually want
information.
 Theoretical population
 Target population
Sampling…….Cont’d
STUDY POPULATION
SAMPLE
TARGET POPULATION
5
Types of Sampling
• Probability (Random) Samples
 Simple random sample
 Systematic random sample
 Stratified random sample
 Multistage sample
 Multiphase sample
 Cluster sample
• Non-Probability Samples
 Incidental sampling
 Convenience sample
 Modal instance sampling
 Purposive sample
 Quota
Types of Sampling
Probability sampling, all elements (e.g., persons,
households) in the population have some probability
of being included in the sample, and the mathematical
probability that any one of them will be selected can
be calculated.
A probability sampling scheme is one in which
every unit in the population has a chance
(greater than zero) of being selected in the
sample, and this probability can be accurately
determined.
Simple Random Sampling
• Applicable when population is small,
homogeneous & readily available
• All subsets of the frame are given an equal
probability. Each element of the frame thus has
an equal probability of selection.
• It provides for greatest number of possible
samples. This is done by assigning a number to
each unit in the sampling frame.
• A table of random number or lottery system is
used to determine which units are to be selected.
• Can be with or without replacement 8
SIMPLE RANDOM SAMPLING……..
Advantages
• Estimates are easy to calculate.
• Simple random sampling is always an EPS design,
but not all EPS designs are simple random
sampling.
Disadvantages
• If sampling frame large, this method
impracticable.
• Minority subgroups of interest in population may
not be present in sample in sufficient numbers
9
Systematic Sampling
• Relies on arranging the target population according to
some ordering scheme and then selecting elements at
regular intervals through that ordered list.
• Systematic sampling involves a random start and then
proceeds with the selection of every kth element from
then onwards. In this case, k=(population size/sample
size).
• It is important that the starting point is not
automatically the first in the list, but is instead
randomly chosen from within the first to the kth
element in the list.
• A simple example would be to select every 10th name
from the telephone directory (an 'every 10th' sample,
also referred to as 'sampling with a skip of 10'). 11
Types of Sampling …..Cont’d
Nonprobability sampling, in contrast, population elements are
selected on the basis of their availability (e.g., because they
volunteered) or because of the researcher's personal judgment
that they are representative.
In nonprobability sampling, population elements are selected on
the basis of their availability (e.g., because they volunteered) or
because of the researcher's personal judgment that they are
representative.
In addition, nonresponse effects may turn any probability design
into a nonprobability design if the characteristics of nonresponse
are not well understood, since nonresponse effectively modifies
each element's probability of being sampled.
Systematic Sampling……
ADVANTAGES:
• Sample easy to select
• Suitable sampling frame can be identified easily
• Sample evenly spread over entire reference
population
DISADVANTAGES:
• Sample may be biased if hidden periodicity in
population coincides with that of selection.
• Difficult to assess precision of estimate from one
survey.
13
Stratified Sampling
Where population embraces a number of distinct
categories, the frame can be organized into separate
"strata." Each stratum is then sampled as an independent
sub-population, out of which individual elements can be
randomly selected.
• Every unit in a stratum has same chance of being selected.
• Using same sampling fraction for all strata ensures
proportionate representation in the sample.
• Adequate representation of minority subgroups of interest
can be ensured by stratification & varying sampling
fraction between strata as required.
14
Stratified Sampling……
• Finally, since each stratum is treated as an
independent population, different sampling
approaches can be applied to different strata.
Drawbacks to using stratified sampling.
• First, sampling frame of entire population has to
be prepared separately for each stratum
• Second, when examining multiple criteria,
stratifying variables may be related to some, but
not to others, further complicating the design, and
potentially reducing the utility of the strata.
• Finally, in some cases (such as designs with a large
number of strata, or those with a specified
minimum sample size per group), stratified
sampling can potentially require a larger sample
than would other methods 15
Cluster Sampling
• Cluster sampling is an example of 'two-stage sampling' .
• First stage a sample of areas is chosen;
• Second stage a sample of respondents within those
areas is selected.
• Population divided into clusters of homogeneous units,
usually based on geographical contiguity.
• Sampling units are groups rather than individuals.
• A sample of such clusters is then selected.
• All units from the selected clusters are studied.
16
Cluster Sampling…….
Advantages :
• Cuts down on the cost of preparing a sampling
frame.
• This can reduce travel and other
administrative costs.
Disadvantages:
 High sampling error compared to simple
random sample of same size.
17
Procedures of Sampling
• The sampling process comprises several stages:
Defining the population of concern
Specifying a sampling frame, a set of items or events
possible to measure
Specifying a sampling method for selecting items or
events from the frame
Determining the sample size
Implementing the sampling plan
Sampling and data collecting
Reviewing the sampling process

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Sampling and Sampling Distributions

• Develop an understanding about different sampling

• Distinguish between probability & non probability

• Discuss the relative advantages & disadvantages of each

The sampling frame must be representative of the population.

The population from which the sample is drawn may not be

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