Hypothesis Testing with Controlled Experiments: Computing P-value using Z-statistic

Fake Professor

Google the word “experiment”, the answer returned is, “a scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact”

While “Experiment” is a broader term, a controlled experiment specifically is about testing impact of a single factor /variable while the other variables remain constant.

Confused? Don’t worry, read ahead. I will attempt to explain this using a scenario.

Imagine Saidulu is an ice-cream manufacturer who wants to increase the sales of his product “Kya toh bhi Ice-cream”.  His friend, Panthulu, suggests him to double the sugar content in ice-cream in order to achieve higher sales.

Will Saidulu go ahead and increase sugar in his ice-cream? That’s a bad business move. Fortunately Saidulu is smart, he conducts a controlled experiment. Voila!

How does he do that?

First, Saidulu tries to understand his customer segments. He narrows down attributes of his major consumer segment on the parameters…

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