Explain p-value with an example
Last updated: March 15, 2026
Quick Overview
Explain p-value in simple terms and provide a concrete example.
Stripe
Statistics & Math
Data Scientist
Stripe
March 15, 2026Data Scientist
Phone Screen
Statistics & Math
Hard
26
11
3,269 solved
Explain p-value in simple terms and provide a concrete example.
Stripe values data-driven decision making. This Phone Screen question assesses whether you can design experiments, interpret results correctly, and avoid common statistical pitfalls like p-hacking or Simpson's paradox.
What the Interviewer Expects
- Derive results from first principles when needed
- Handle complex scenarios with multiple interacting variables
- Design experiments that account for real-world complications
- Discuss advanced topics: Bayesian methods, causal inference, resampling
- Connect statistical concepts to business decision-making
- Identify subtle errors in reasoning (Simpson's paradox, survivorship bias)
Key Topics to Cover
Hypothesis testing (H0, H1, p-values)
Central Limit Theorem
Probability distributions
Power analysis and sample size calculation
Confidence intervals and significance levels
How to Approach This
- Define your hypotheses (H0 and H1) clearly before performing any test.
- Calculate required sample size BEFORE running an experiment, using power analysis.
- Remember the Central Limit Theorem: sample means become approximately normal with large n.
- Watch for Simpson's paradox. Always segment data by key dimensions.
- Distinguish between statistical significance and practical significance.
Possible Follow-up Questions
- How would you handle multiple comparisons?
- How would you design a follow-up experiment based on these results?
- What alternative statistical method could you use here?
- What assumptions does this test make, and how would you validate them?
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Problem Formulation
To explain the p-value, we first need to establish a hypothesis testing framework. In hypothesis testing, we start with two competing hypotheses:
- Null Hypothesis (H0): This is the hypothesis t...
Solution Approach
To compute the p-value, we follow these steps:
- Collect Data: Conduct an experiment or collect data. For instance, use two groups: one using the new feature and one not using it.
- **Choose a ...
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