1
$\begingroup$

I have read an exercise and its correction and I am not sure I understand it: The population of a country is divided into 3 housing zones in proportions: 10%, 40% and 50%. 200 subjects are chosen at random from each zone. The (oberved) means of a dummy variable $X$ in each area were: $m1 = 1.5$, $m2 = 2$ and $m3 = 2.5$. The estimate of the common (residual) variance is $s^2_R = 5$.

The question is to find the mean of the dummy variable in the country and to estimate its variance.

  1. Calculation of the mean:

$$m = 10\% \times 1.5 + 40\% \times 2 + 50\% \times 2.5 = 2.2$$

  1. Calculation of the variance of the mean:

$$ var(m) = (0.1^2 + 0.4^2 + 05^2)/200 \times s^2_R $$

I don't understand all the formula of the variance.

The begining is $var(aX) = a^2 var(X)$ but why should we divide it by $200$?

Thanks for any clarification!

$\endgroup$

1 Answer 1

1
$\begingroup$

The answer is:

$$var(m) = var( 10\% \times m_1 + 40\% \times m_2 + 50\% \times m_3) \\ = 0.1^2 var(m_1) + 0.4^2 var(m_2) + 0.5^2 var(m_3)$$

With $var(X_1) = var(X_2) = var(X_3) = s^2_R$, the residual variance.

We can deduce that $var(m_1) = s^2_R / n_1, var(m_2) = s^2_R / n_2, var(m_3) = s^2_R / n_3$. From the information given in the exercise $n_1=n_2=n_3 = 200$.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge that you have read and understand our privacy policy and code of conduct.

Not the answer you're looking for? Browse other questions tagged or ask your own question.