A cost analysis of ranked set sampling to estimate a population mean

Abstract

Ranked set sampling (RSS) can be a useful environmental sampling method when measurement costs are high but ranking costs are low. RSS estimates of the population mean can have higher precision than estimates from a simple random sample (SRS) of the same size, leading to potentially lower sampling costs from RSS than from SRS for a given precision. However, RSS introduces ranking costs not present in SRS; these costs must be considered in determining whether RSS is cost effective. We use a simple cost model to determine the minimum ratio of measurement to ranking costs (cost ratio) necessary in order for RSS to be as cost effective as SRS for data from the normal, exponential, and lognormal distributions. We consider both equal and unequal RSS allocations and two types of estimators of the mean: the typical distribution-free (DF) estimator and the best linear unbiased estimator (BLUE). The minimum cost ratio necessary for RSS to be as cost effective as SRS depends on the underlying distribution of the data, as well as the allocation and type of estimator used. Most minimum necessary cost ratios are in the range of 1–6, and are lower for BLUEs than for DF estimators. The higher the prior knowledge of the distribution underlying the data, the lower the minimum necessary cost ratio and the more attractive RSS is over SRS. Copyright © 2005 John Wiley & Sons, Ltd.