New Mexico National Bank (NMNB) operates branches in 23 cities and towns through

Question

New Mexico National Bank (NMNB) operates branches in 23 cities and towns throughout the state of New Mexico. The bank offers a complete range of financial services, including Visa and MasterCard credit cards. NMNB has 53,400 people in the state using its credit cards. Based on their original applications, the bank has certain information about these individuals, including name, address, zip code, telephone number, income, education, and assets. NMNB is interesting in determining whether a relationship exists between the volume of purchases charged on credit cards and the demographic characteristics of the individual cardholders. For example, are individuals in certain parts of the state more or less likely to be heavy users of the card? Is there a relationship between a person’s income and his or her level of card usage? Is there a relationship between the person’s level of education and card usage? The data can be used to more effectively target offering sent through the mail if significant relationships are found. Paul 244f6ae7-6c0c-4103-ad1a-e08e5899c97f.png, research director for NMNB, is in the process of developing a design for the research. If you were Paul 244f6ae7-6c0c-4103-ad1a-e08e5899c97f.png, how would you answer the following 1. What sampling frame(s) might you use for the project?

Explanation / Answer

In the given case, NMNB desires to determine the relationship between its offerings and the demographic characteristic of individuals. For example: services chose by the educated class, change in usage range based on income level, etc.

Paul must choose a list frame for this purpose. List frame basically consists of list of observable units on which single stage sampling can be performed with ease. hence the demographic –usage study will be facilitated by this sampling frame.

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