Explain instrumental variables with an example
Last updated: August 28, 2025
Quick Overview
Explain instrumental variables in simple terms and provide a concrete example.
Zscaler
August 28, 202517
5
1,294 solved
Explain instrumental variables in simple terms and provide a concrete example.
Zscaler asks this during the Phone Screen to assess your experimentation skills. They want to see how you define success metrics, design controlled experiments, and interpret results with appropriate statistical rigor.
What the Interviewer Expects
- Design a rigorous experiment with proper randomization and sample size calculation
- Define primary and guardrail metrics with clear rationale
- Address novelty effects, network effects, and interference
- Segment results appropriately and identify heterogeneous treatment effects
- Propose follow-up analyses when results are ambiguous
Key Topics to Cover
How to Approach This
- Define success metrics carefully. A good metric is measurable, actionable, and aligned with business goals.
- Run experiments long enough to account for novelty effects and weekly seasonality.
- Use funnel analysis to identify where users drop off for maximum optimization impact.
- Segment results by key dimensions (platform, country, user cohort) to catch hidden patterns.
- Consider network effects and interference between treatment and control groups.
Possible Follow-up Questions
- What would you do if a stakeholder wants to end the experiment early because initial results look good?
- How would you handle interference between treatment and control?
- How would you handle seasonality in your experiment?
- What if the experiment shows a positive short-term effect but you suspect a negative long-term impact?
Sharpen Your Skills on Codemia
Practice similar problems with our interactive workspace, get AI feedback, and track your progress.
Browse Analytics QuestionsSample Answer
Problem Setup
To understand instrumental variables (IV), we first need to frame an analytical question. Let's consider the effect of a new feature in Zscaler's product on customer satisfaction. Our question might b...
Methodology
We will utilize Two-Stage Least Squares (2SLS) as our statistical approach for this problem. In the first stage, we will regress customer engagement on the instrumental variable (rollout timing), isol...
Submit Your Answer
