Question

Question 2) A marketing research manager intends to survey a simple random sample of Swiss consumers and ask questions about level of beverage consumption. How can she estimate the population standard deviation for this variable before selecting the sample? Why would she need to do that? What would happen if her initial estimate were not reflected in the sample results (i.e., if the estimated standard deviation in the sample turned out to be larger than expected)?

Answer 1

a)      Population standard deviation can be estimated by studying the analysis of similar country like Switzerland. She needs to keep in mind that the demographic factors of the selected country are similar to Switzerland. Switzerland being a tourist destination, she needs to account the tourist population as certain percentage of the total population. Studying analysis of neighboring European countries will definitely be the first and most viable option to proceed further
b)      She may need to estimate the population standard deviation before selecting the sample to ensure that the samples are selected correctly, i.e., the sample selection follows the principles of sample being heterogeneous in nature, stratified selection, and should be a good representative of the complete population

c) If the initial estimate were not reflected in the sample results (i.e., if the estimated standard deviation in the sample turned out to be larger than expected), then she may go for stratified random sampling. In which the sample selected will be divided into smaller groups known as strata. The strata are formed based on shared attributes or characteristics of the respondents. These stratas are homogenous within and heterogenous amongst each other.