Explain Simpson's paradox with an example
Last updated: August 25, 2025
Quick Overview
Explain Simpson's paradox in simple terms and provide a concrete example.
Coinbase
Statistics & Math
Data Scientist
Coinbase
August 25, 2025Data Scientist
Take-home Project
Statistics & Math
Medium
2
11
555 solved
Explain Simpson's paradox in simple terms and provide a concrete example.
Coinbase values data-driven decision making. This Take-home Project 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
Conditional probability and Bayes theorem
Power analysis and sample size calculation
Causal inference basics
Multiple testing correction (Bonferroni, FDR)
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
- What if the sample size is very small?
- 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?
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Problem Formulation
Simpson's paradox occurs when a trend that appears in several different groups of data disappears or reverses when these groups are combined. To illustrate this, consider a hypothetical example involv...
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