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Handout 2 Properties of the Sample Mean and Sample Standard Deviation

In addition to being able to compute the sample mean and sample standard deviation, it is important to understand some general properties of these measures. In particular, we investigate what happens to the mean and standard deviation of a data set, when : ( 1 ) The data set is shifted i.e. a constant is added to every value of the data set. ( 2 ) The data set is scaled i.e. every value of the data set is multiplied by a constant. By way of motivation, consider the data set consisting of the values of annual salary for the professional employees of a certain firm. Suppose the sample mean is $31,000 , and the sample standard deviation is $6,000. Further suppose that next year everyone will receive a 5% salary increase, and, in addition, a $1000 bonus on top of that. What is the sample mean and sample standard deviation of the data set consisting of next years salaries ? Note the new data set is just this years data set scaled and shifted .... In what follows { x1 , x2 , , xn } is the original data set. Theorem If c is a constant, and yi = xi + c , then If c is a constant, and yi = cxi , then These results are intuitive and easy to prove - so easy we wont bother to give a proof. .

Theorem If c is a constant, and yi = xi + c , then If c is a constant, and yi = cxi , then The first result is very intuitive-- if one reflects on what the standard deviation measures. The standard deviation measures dispersion about the mean ; and shifting the entire data set by a constant doesnt change the position of any datum relative to the mean. ( E.g. suppose, yielding to pressure to inflate grades, I give everyone 5 extra points on Examination I . If Ms. Smith was 12 points above the class mean before, she still is ; if Mr. Jones was 7 points below the class mean, he still is after I give the extra points. ) Hence just shifting a data set leaves the sample standard deviation unchanged. ) This is an important result, so lets go ahead and give a proof of both statements of the theorem. .

If , for every index i , yi = xi + c , then

But we know that

, so substitution gives

, the cs cancel to give

, square both sides

remember this is for any index i , hence

So -----

, and hence

, as claimed.

Now, if for every index i , yi = cxi , then .

But we know that

, so substitution gives . So

, remember this is for any index i, so

; hence

Now we take the square root of both sides, recalling the basic algebraic fact that Numerical Example For the motivational example given above, let xi be the salary of employee i this year, and let yi be the salary of that same employee next year. Then yi = 1.05 xi + 1000. ( If you dont see this relationship inside of about 20 seconds, then you really, really need to review high-school algebra !!! ) We have given two theorems just presented , sy = 1.05 ( 6,000 ) = 6,300. Important Consequence of these Properties Suppose we let ; that is, we obtain a new data set by taking every and sx = 6,000. By the ; and , to obtain , as claimed.

old datum, subtracting the sample mean and dividing by the sample standard deviation. Note that and sx are constants, and so ,

is just a scale and a shift on the original data set. Then , ;

and

The process of taking the values of a data set, subtracting the mean and dividing by the standard deviation is called standardization. The term comes from the result weve just obtained : no matter what the mean and standard deviation of the original data set, the new data set always has mean zero and standard deviation one the standard case.

Standardization will come up again and again, so we record the above result for reference: Theorem Suppose { x1 , x2 , , xn } is a data set with sample mean standard deviation sx . Then if , and sw = 1. , and sample

Some problems relating to properties of the sample mean and sample standard deviation. ( Dont peek at the solutions right away !! )

1. Last summer I was at one of those June weddings with hundreds of identically costumed bridesmaids. Between the wedding ceremony proper and the reception, the couple engaged in a strange wedding ritual ( arent they all ? ) : they measured the barefoot height of each bridesmaid in inches. ( Call this variable x. ) The sample mean and sample standard deviation of these measurements were = 64 in and sx = 2.2 in. , respectively.

Suppose the couple doing the measuring had measured the height of the bridesmaids in centimeters, and the young ladies had left their heels on. ( Call this variable y. ) What would be the sample mean and sample standard deviation for these measurements? Facts you need : There are 2.54 cm to an inch. The bridesmaids are all wearing 3 inch heels.

2. A random sample of items at local toy stores revealed that the before tax price ( w ) of the items had a sample mean of $23.59 and a sample standard deviation of $3.13. If z denotes the price of an item after a uniform sales tax of 6% is added, what are the sample mean and sample standard deviation for z ?

3.

A data set had a sample mean of

= 2.5 and a sample standard deviation of

sx = 3.1. If for every observation of x, one defines yi = ( xi - 2.5 )/3.1 , what are the sample mean and sample standard deviation for the variable y ?

Solutions : 1. One has yi = 2.54 ( xi + 3 ) = 2.54xi + 7.62. Hence and sy = 2.54 sx = 2.54( 2.2 ) = 5.59 cm 2. Since z = 1.06w ( basic junior high algebra ) , sz = 1.06 sw = 1.06( 3.13 ) = $3.32. ;

3. This is a special case of a general result : If one defines then = 0 , and sy = 1. ( See your notes ! )