Explain Simpson's paradox with an example
Last updated: April 5, 2026
Quick Overview
Explain Simpson's paradox in simple terms and provide a concrete example.
Goldman Sachs
Statistics & Math
Data Scientist
Goldman Sachs
April 5, 2026Data Scientist
Technical Screen
Statistics & Math
Medium
41
5
578 solved
Explain Simpson's paradox in simple terms and provide a concrete example.
Goldman Sachs values data-driven decision making. This Technical 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
- Set up the problem formally with proper notation
- Apply the correct statistical test with clear justification
- Interpret results with appropriate caveats and confidence levels
- Discuss practical significance vs statistical significance
- Identify potential confounders and how to address them
Key Topics to Cover
Regression analysis
Central Limit Theorem
Bayesian vs frequentist inference
Multiple testing correction (Bonferroni, FDR)
Power analysis and sample size calculation
Conditional probability and Bayes theorem
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 design a follow-up experiment based on these results?
- What alternative statistical method could you use here?
- What if the sample size is very small?
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