Business Statistics For Dummies, 2nd Edition

Chapter 10

Sampling Techniques and Distributions

IN THIS CHAPTER

Getting familiar with sampling techniques

Using sampling distributions to estimate probabilities

A population is a collection of data that we are interested in studying; a sample is a selection of data randomly chosen from a population. The use of sample data is the basis for a wide variety of business applications. This is because obtaining information about an entire population is likely to be very time-consuming and costly. Instead, samples may be used to understand the behavior of the underlying population.

One of the requirements of using samples to draw conclusions about a population is that the samples accurately mirror the population; otherwise, any conclusions that are reached about the population are bound to be inaccurate. Several different types of sampling techniques have been developed to accurately capture the properties of a population. The choice of technique depends on several factors, such as:

• What are the demographic characteristics of interest?
• How easy will it be to obtain sample data?
• How much data is needed to ensure accurate results?

For example, suppose that the New York State government wants to analyze the distribution of ages of everyone living in the state. This helps determine what ...