Population Variance and Estimators
Suppose you are a consultant to Starbucks Corporation. Starbucks is interested in measuring the population variance in the number of customers it has on a daily basis in all its stores in the U.S. However, it is limited in its ability to track this number across all stores and has to select a sample. Think critically about the following questions:
- There are two estimators for the population variance with different levels of bias and variance. Explain how you would go about choosing between these two estimators.
- You are interested in coming up with a 95% confidence interval for the population variance. How would you go about deciding the number of outlets to sample?
Note: One of the sources must be the textbook: Doane, D.P. & Seward, L.E. (2013). Applied Statistics in Business and Economics, 4th Edition. McGraw-Hill.