Question

If random samples of the given sizes are drawn from populations with the given proportions: (a) Find the standard error of the distribution of differences in sample proportions, \(\hat{p}_{A}-\hat{p}_{B}\) (b) Determine whether the sample sizes are large enough for the Central Limit Theorem to apply. Samples of size 80 from population \(A\) with proportion 0.40 and samples of size 60 from population \(B\) with proportion 0.10

Short answer

The standard error of the difference in sample proportions is \( 0.067 \). The sample sizes are large enough for the Central Limit Theorem to apply.

Step-by-step solution

Calculating the Standard Error

First, we need to calculate the standard error of the differences in sample proportions. Using the given values and substituting into the formula above gives us: \( SE = \sqrt{ \frac{{0.4 * 0.6}}{{80}} + \frac{{0.1 * 0.9}}{{60}} } = \sqrt{ \frac{{0.24}}{{80}} + \frac{{0.09}}{{60}} } \) which simplifies to \( SE = \sqrt{0.003 + 0.0015} = \sqrt{0.0045} = 0.067082039 \) Round off to three decimal places, we have \( SE = 0.067 \)

Applying the Central Limit Theorem

Now, let's determine if the Central Limit Theorem can be applied. The theorem will apply if both \( n_{A}p_{A} \) and \( n_{B}p_{B} \) are greater than or equal to 5. Checking for population \( A \), we have \( 80 * 0.4 = 32 \), and for population \( B \) we get \( 60 * 0.1 = 6 \). Both values are larger than 5 so you may apply the Central Limit Theorem.

Key concepts

Standard Error

Understanding the standard error is crucial for interpreting statistical results, especially when dealing with sample data. In essence, the standard error measures the variability or precision of a sampling statistic such as the mean or a proportion. It is affected by two main factors: the standard deviation of the population and the sample size.

The formula for calculating the standard error of the difference between two sample proportions \( \hat{p}_{A} - \hat{p}_{B} \) is given by:\[ SE = \sqrt{ \frac{{p_{A}(1 - p_{A})}}{{n_{A}}} + \frac{{p_{B}(1 - p_{B})}}{{n_{B}}} } \]
Where \( n_{A} \) and \( n_{B} \) represent the sample sizes and \( p_{A} \) and \( p_{B} \) represent the population proportions. In the given exercise, after substituting the respective values, we calculated the standard error as approximately 0.067. This value indicates the expected standard deviation of the difference between the sample proportions if we were to repeat the sampling process multiple times.

Sample Proportions

Sample proportions represent the fraction of observations in a sample that belong to a particular category. For instance, if you have a sample where 40 out of 100 observations are red balls, the sample proportion for red balls would be 0.40. It’s important to note that sample proportions can be used as estimates of population proportions, but they come with a margin of error – this is where the central limit theorem and standard error come into play.

In statistical analysis, it's common to compare proportions from different samples to draw conclusions about the population. The accuracy of these comparisons vastly depends on the standard error of the sample proportions. Our exercise deals with two populations, A and B, with proportions 0.40 and 0.10, respectively. To determine the reliability of the differences observed between two sample proportions, analyzing the standard error is a key step.

Distribution of Differences

When comparing two sample proportions, as in our exercise, we deal with the distribution of differences between those proportions. This distribution provides insights into how much the proportion from one sample is likely to differ from the proportion from another. When we calculate and examine these differences, we can make statistical inferences about the population.

The central limit theorem plays a significant role in dealing with the distribution of differences. It states that given a sufficiently large sample size, the distribution of the sample means (and proportion differences) will be approximately normally distributed, regardless of the population's initial distribution.

In the exercise, we confirmed that both population samples are large enough for the central limit theorem to apply by checking if \( n_{A}p_{A} \) and \( n_{B}p_{B} \) are both greater than 5. Hence, we can say that the sampling distribution of the difference in sample proportions \( \hat{p}_{A} - \hat{p}_{B} \) follows a normal distribution, and this allows us to make further statistical inferences using this normal model.