JSM 2004 - Toronto

Abstract #301728

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Activity Number: 275
Type: Contributed
Date/Time: Tuesday, August 10, 2004 : 2:00 PM to 3:50 PM
Sponsor: Business and Economics Statistics Section
Abstract - #301728
Title: Minimum Sample Sizes with Rare Events in Stratified Designs
Author(s): Eric Falk and Joo M. Kim*+
Companies: Ernst & Young LLP and Ernst & Young LLP
Address: 1225 Connecticut Ave., NW, Washington, DC, 20036,
Keywords: stratified sampling ; rare events ; ratio estimation ; simulation ; normality
Abstract:

Sampling in a rare event setting with stratified designs has many statistical issues: empty strata, expectation of finding enough of the rare event in each stratum, accuracy of estimates, accuracy of variance calculations, and normality assumptions for confidence intervals. Sampling sales and use tax data involves such a setting, where a large population is sampled to find a rare event (taxable amount) and a small ratio is calculated. Most states require minimum stratum sample sizes of anywhere between 250 to 300 records. We study when this minimum requirement is adequate, insufficient, or in excess of the number necessary to obtain reasonable estimates.

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