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Statistical significance

As explained in Machine Learning System Design

A statistical procedure that evaluates whether observed data provide sufficient evidence against a null hypothesis according to a chosen significance criterion.

Statistical significance evaluates whether an observed difference is unlikely under a null hypothesis. In A/B testing, the null hypothesis says that the group difference is noise rather than a real effect. section 12.2.4

Interpret the result with these checks:

  • Compare the p-value with a chosen significance level α, commonly 0.05. A p-value below α indicates statistical significance under the test’s assumptions. section 12.2.4
  • Choose the test based on the experiment and data. Welch’s t-test is useful when comparing means with unequal group variances. section 12.2.4
  • Do not equate significance with a positive or large outcome. Report the effect, confidence interval, practical metrics, and relevant user or item segments. section 12.3.4

A/B test report

A conversion-rate comparison reports a p-value of 0.0472 and concludes a significant effect, while an average-order-value comparison reports 0.3704 and concludes no significant effect. The decision still requires effect size and confidence intervals. section 12.3.4

Table 12.1 An example of what fields can be included in the reporting table
Metric
Group A
Group B
MDE
Lift
p-value
Conclusion
CVR
75.2%
79.8%
5%
6.12%
0.0472
+4.2–6.9% (significant)
AOV
$232.2
$242.8
11%
4.57%
0.3704
No significant effect
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Browse the reporting table for a compact comparison of group metrics, minimum detectable effect, lift, p-value, confidence range, and conclusion. section 12.3.4

How Machine Learning System Design covers it

How deep it goes
Defines p-values, significance levels, hypotheses, and test choice, but defers detailed guidance for selecting the appropriate statistical test.
Examples
Uses Welch’s t-test and an A/B reporting table comparing conversion rate and average order value.
What it assumes
Assumes an A/B experiment with control and experimental groups, measured metrics, and a chosen statistical test.
What you can do after
Evaluate A/B-test results and report significance alongside effect size, confidence intervals, practical metrics, and segment effects.
How it connects
Connects null hypotheses, alternative hypotheses, p-values, significance levels, t-tests, confidence intervals, and A/B testing.

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