



Why Do We Pool for the TwoProportion zTest?

 
by Charles Peltier Saint Mary's College Notre Dame, Indiana

  "Pooling" is the name given to a technique used to obtain a more precise estimate of the standard deviation of a sample statistic by combining the estimates given by two (or more) independent samples. When performing tests (or calculating confidence intervals) for a difference of two means, we do not pool. In other statistical situations we may or may not pool, depending on the situation and the populations being compared. For example, the theory behind analysis of variance and the inferences for simple regression are based on pooled estimates of variance. The rules for inference about two proportions firmly go both(!) ways. We always use a pooled estimate of the standard deviation (based on a pooled estimate of the proportion) when carrying out a hypothesis test whose null hypothesis is p_{1} = p_{2}  but not when constructing a confidence interval for the difference in proportions. Why?
In any hypothesis test, we are calculating conditional probabilities based on the assumption that the null hypothesis is true. For example, in calculating the sample z with proportions or t with means, we use the values derived from the null hypothesis as the mean of our sampling distribution; if the null hypothesis determines a value for the standard deviation of the sample statistic, we use that value in our calculations. If the null hypothesis fails to give us a value for the standard deviation of our statistic, as is the case with means, we estimate the standard deviation of the statistic using sample data.
The special feature of proportions important for this discussion is that the value of p determines the value of
(the standard deviation of
):
. This is very different from the situation for means, where two populations can have identical means but wildly different standard deviations  and thus different standard deviations of the sample means. We can't estimate
from a value of
; we need to go back to the data and look at deviations. In the onepopulation case, this special feature means that our test statistic
follows a z, rather than t, distribution when we work with one proportion. In this case, we actually do know the variance based on the null hypothesis.
When we move to considering two populations and the difference between proportions of "successes," our null hypothesis for a test is generally p_{1} = p_{2} (or equivalently, p_{1}  p_{2} = 0 ). This null hypothesis implies that the estimates of p_{1} and p_{2}  that is,
and
 are both estimates for the assumed common proportion of "successes" in the population (that is, the proportion). If the null hypothesis is true  and all our calculations are based on this assumed truth  we are looking at two independent samples from populations with the same proportion of successes. So with independent random samples, the variance of the difference in sample proportions (
) is given by the sum of the variances, according to the familiar rules of random variables:
.
When we are carrying out a test, we don't know the value of p  in fact, we are asking if there is any such single value  so we don't claim to know the value for (
). We calculate our best estimate of
from our best estimate of p, which is "total number of successes/total number of trials" (in our usual notation,
). Substituting this value of
for both p_{1} and p_{2} gives our estimate of
; we have merged the data from the two samples to obtain what is called the "pooled" estimate of the standard deviation. We have done this not because it is more convenient (it isn't  there's more calculation involved) nor because it reduces the measurement of variability (it doesn't always  often the pooled estimate is larger*) but because it gives us the best estimate of the variability of the difference under our null hypothesis that the two sample proportions came from populations with the same proportion. Using the inappropriate formula will either increase the βrisk beyond what is claimed or increase the αrisk beyond what is intended; neither is considered a good result.
Thus for a hypothesis test with null hypothesis p_{1} = p_{2}, our test statistic (used to find the pvalue or to compare to the critical value in a table) is
with
.
Of course, the above discussion applies only to hypothesis tests in which the null hypothesis is p = p_{2}. For estimating the difference p_{1}  p_{2} , we are not working under the assumption of equal proportions; there would be nothing to estimate if we believe the proportions are equal. So our estimate of p_{1}  p_{2} is
. Likewise, if we have null hypothesis of the form p_{1} = p_{2} + k , our assumption is that the proportions are different, so there is no to estimate by pooling, and our test statistic is
.
So we have the answer to the original question. When we carry out a test with null hypothesis p_{1} = p_{2}, all our calculations are based on the assumption that this null is true — so our best estimate for the variance (and thus the standard deviation) of the difference between sample proportions (
) is given by the "pooled" formula. In all other inferences on two proportions (estimation of a difference, a test with null p_{1} = p_{2} + k), we do not have any such assumption — so our best estimate for the variance of the difference between sample proporions is given by the "unpooled" formula. We pool for the one case, and do not pool for the others, because in the one case we must treat the two sample proportions as estimates of the same value and in the other cases we have no justification for doing so.
*A technical footnote: Here are some cases in which we can readily compare the relative sizes of pooled and unpooled estimates.
1. If
, the two (pooled and unpooled) estimates of
will be exactly the same, since we obtain
.
2. If the sample sizes are equal (n_{1} = n_{2} = n), then
. In this case, the unpooled estimate of the variance of the difference is
, and the pooled estimate of variance of the difference is
, which can (with heroic algebra!) be rewritten as
, so the pooled estimate is actually larger unless the sample proportions are equal.
3. If the sample proportions are unequal but equally extreme (equally far from .5), then we have
and
with 0 ‹ e ‹ .5. In this case,
, the pooled estimate of variance can be written
, and the unpooled estimate can be written
and the difference is
, so the pooled estimate is always larger than the unpooled estimate.
For example, with
and
(so that e = .3 ), with n_{1} = 10 and n_{2} = 15, the unpooled estimate of variance is .02667 and the pooled estimate is .04107, and
.
4. If the sample sizes are different enough (precise cutoffs are difficult to state), and the more extreme (further from .5) sample proportion comes from the largersample, the pooled estimate of the variance will be smaller than the unpooled estimate, but if the more extreme proportion is from the smaller sample, the pooled estimate of variance will be larger than the unpooled estimate. For example, consider the following table showing the effects of sample size when
and
:
n_{1} 
n_{2} 
Pooled Estimate 
Unpooled Estimate 

15 
10 
.0336 
.025 
Pooled is larger 
10 
15 
.0286 
.03 
Pooled is smaller 
For
and
: (same degree of "extremeness" as in the table, but on opposite sides of .5), a greater difference in sample sizes is required to show the same effect — but sample sizes of 15 and 35 suffice, as shown here:
n_{1} 
n_{2} 
Pooled Estimate 
Unpooled Estimate 

35 
15 
.0236 
.0129 
Pooled is larger 
15 
35 
.0179 
.0186 
Pooled is smaller 
Charlie Peltier has been teaching undergraduate mathematics at Saint Mary's College (Notre Dame, IN) since 1974, (including an introdutory statistics course since 1975), after teaching high school mathematics at schools in Indiana and Massachusetts for three years. He has a B.S. in mathematics from the College of the Holy Cross and a Ph.D. in mathematics from the University of Notre Dame. He was a Reader in Calculus and has been a Reader in Statistics since 2000. He has run the Statistics course in the Saint Mary's Summer Institute since 2000 and is a longtime participant in the AP Statistics EDG.




