Net worth is defined as total assets (value of house, cars, money, etc.) minus total liabilities (mortgage balance, credit card debt, etc.). According to a recent study by TNS Financial Services, 7% of American households had a net worth in excess of \$1 million (excluding their primary residence). A random sample of 1000 American households results in 82 having a net worth in excess of \$1 million. Explain why the results of this survey do not necessarily imply that the proportion of households with a net worth in excess of \$1 million has increased.
Table of contents
- 1. Intro to Stats and Collecting Data1h 14m
- 2. Describing Data with Tables and Graphs1h 55m
- 3. Describing Data Numerically2h 5m
- 4. Probability2h 16m
- 5. Binomial Distribution & Discrete Random Variables3h 6m
- 6. Normal Distribution and Continuous Random Variables2h 11m
- 7. Sampling Distributions & Confidence Intervals: Mean3h 23m
- Sampling Distribution of the Sample Mean and Central Limit Theorem19m
- Distribution of Sample Mean - Excel23m
- Introduction to Confidence Intervals15m
- Confidence Intervals for Population Mean1h 18m
- Determining the Minimum Sample Size Required12m
- Finding Probabilities and T Critical Values - Excel28m
- Confidence Intervals for Population Means - Excel25m
- 8. Sampling Distributions & Confidence Intervals: Proportion1h 25m
- 9. Hypothesis Testing for One Sample3h 29m
- 10. Hypothesis Testing for Two Samples4h 50m
- Two Proportions1h 13m
- Two Proportions Hypothesis Test - Excel28m
- Two Means - Unknown, Unequal Variance1h 3m
- Two Means - Unknown Variances Hypothesis Test - Excel12m
- Two Means - Unknown, Equal Variance15m
- Two Means - Unknown, Equal Variances Hypothesis Test - Excel9m
- Two Means - Known Variance12m
- Two Means - Sigma Known Hypothesis Test - Excel21m
- Two Means - Matched Pairs (Dependent Samples)42m
- Matched Pairs Hypothesis Test - Excel12m
- 11. Correlation1h 24m
- 12. Regression1h 50m
- 13. Chi-Square Tests & Goodness of Fit2h 21m
- 14. ANOVA1h 57m
8. Sampling Distributions & Confidence Intervals: Proportion
Sampling Distribution of Sample Proportion
Problem 8.T.5a
Textbook Question
According to the National Center for Health Statistics, 22.4% of adults are smokers. A random sample of 300 adults is obtained.
a. Describe the sampling distribution of p̂, the sample proportion of adults who smoke.
Verified step by step guidance1
Identify the population proportion \(p\) given in the problem, which is 22.4%, or \(p = 0.224\).
Recognize that \(\hat{p}\), the sample proportion, is a random variable representing the proportion of smokers in the sample of size \(n = 300\).
State that the sampling distribution of \(\hat{p}\) can be approximated by a normal distribution if the sample size is large enough, which is generally true if both \(np \geq 10\) and \(n(1-p) \geq 10\).
Calculate the mean (expected value) of the sampling distribution of \(\hat{p}\), which is \(E(\hat{p}) = p\).
Calculate the standard deviation (standard error) of the sampling distribution of \(\hat{p}\) using the formula \(\sigma_{\hat{p}} = \sqrt{\frac{p(1-p)}{n}}\).
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Key Concepts
Here are the essential concepts you must grasp in order to answer the question correctly.
Sampling Distribution of a Sample Proportion
The sampling distribution of a sample proportion (p̂) describes the probability distribution of p̂ over many random samples of the same size from a population. It shows how p̂ varies from sample to sample and is approximately normal if the sample size is large enough.
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Sampling Distribution of Sample Proportion
Mean and Standard Deviation of the Sampling Distribution
The mean of the sampling distribution of p̂ equals the true population proportion (p). The standard deviation, called the standard error, is calculated as sqrt[p(1-p)/n], where n is the sample size. This measures the typical variability of p̂ around p.
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Sampling Distribution of Sample Mean
Conditions for Normal Approximation
For the sampling distribution of p̂ to be approximately normal, both np and n(1-p) must be at least 10. This ensures the sample size is large enough for the Central Limit Theorem to apply, allowing use of normal probability methods.
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Using the Normal Distribution to Approximate Binomial Probabilities
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