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Data ScienceIntermediate18 min readUpdated March 2025

Hypothesis Testing & A/B Tests

Hypothesis testing lets you decide whether an observed difference is real or just random noise. Learn the null hypothesis, p-values, common tests, and how to run a sound A/B test.

The Logic of a Test

A hypothesis test compares two competing claims:

Null hypothesis (H0) — there is no effect or difference.

Alternative hypothesis (H1) — there is an effect.

The p-value is the probability of seeing data at least this extreme if H0 were true. A small p-value (commonly below a pre-set significance level alpha of 0.05) is evidence against H0.

Choosing a Test

The right test depends on your data:

  • t-test — Compare means of two groups (numeric outcome).
  • Paired t-test — Same subjects measured before and after.
  • Chi-square test — Association between two categorical variables.
  • ANOVA — Compare means across three or more groups.
  • Mann-Whitney U — Non-parametric alternative when normality fails.

Example: Comparing Two Groups

Did a new checkout page change average order value?

python
import numpy as np
from scipy import stats

rng = np.random.default_rng(42)
control = rng.normal(loc=52, scale=12, size=400)
variant = rng.normal(loc=54, scale=12, size=400)

t_stat, p_value = stats.ttest_ind(variant, control, equal_var=False)

# Effect size (Cohen's d)
pooled = np.sqrt((variant.var(ddof=1) + control.var(ddof=1)) / 2)
d = (variant.mean() - control.mean()) / pooled

print(f"t = {t_stat:.2f}, p = {p_value:.4f}, d = {d:.2f}")
if p_value < 0.05:
    print("Reject H0: difference is statistically significant")

Running a Sound A/B Test

Good experiments are designed before data is collected:

  • Pick one primary metric and the minimum effect worth detecting up front.
  • Calculate the required sample size from power (usually 80%) and alpha.
  • Randomly assign users and avoid stopping early when results "look good".
  • Report effect size and a confidence interval, not just the p-value.
  • Beware multiple comparisons — testing many metrics inflates false positives.

Key Takeaways

  • A p-value is not the probability that H0 is true.
  • Statistical significance is not the same as practical significance.
  • Decide sample size and metrics before running an experiment.
  • Always report effect size alongside the p-value.

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