The role of statistical significance in experimentation

Statistical significance is a critical concept in experimentation that helps differentiate meaningful results from random chance, playing a pivotal role in validating A/B tests and other experiments. It involves understanding the null and alternative hypotheses, with p-values and significance levels serving as tools to determine if findings are statistically significant, usually at a threshold like 0.05. However, achieving statistical significance doesn't guarantee practical significance, as the actual effect size and its real-world impact must also be considered. Best practices in experimentation include ensuring adequate sample sizes, conducting power analyses, and considering temporal factors to ensure reliable results, while advanced techniques like variance reduction and Bayesian methods can enhance experiment efficiency and insights. Common pitfalls include misinterpreting p-values, focusing solely on statistical significance without considering practical relevance, and failing to account for biases or confounding variables. By applying these principles and leveraging platforms like Statsig, organizations can make informed, data-driven decisions that align with their business goals.