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Contrast Lasso vs Ridge trade‑offs

Last updated: Mar 29, 2026

Quick Overview

This question evaluates a Data Scientist's understanding of regularization methods (L1/Lasso, L2/Ridge, Elastic Net), their bias–variance trade-offs, variable selection behavior under multicollinearity, and the implications for inference on a treatment indicator in linear models.

  • hard
  • Instacart
  • Machine Learning
  • Data Scientist

Contrast Lasso vs Ridge trade‑offs

Company: Instacart

Role: Data Scientist

Category: Machine Learning

Difficulty: hard

Interview Round: Onsite

Contrast Lasso and Ridge for modeling contribution per order with p=50 features (highly correlated marketing dummies, weather variables, daypart). a) Explain bias–variance trade‑offs, variable selection behavior under correlated groups, and how each affects uncertainty quantification for treatment effects. b) Describe when Elastic Net strictly dominates Lasso or Ridge alone, and how you’d tune α and λ via cross‑validation while keeping inference valid (e.g., post‑selection refitting or stability selection). c) Discuss how regularization interacts with collinearity in treatment×covariate interactions and the risk of shrinking true heterogeneous effects to zero.

Quick Answer: This question evaluates a Data Scientist's understanding of regularization methods (L1/Lasso, L2/Ridge, Elastic Net), their bias–variance trade-offs, variable selection behavior under multicollinearity, and the implications for inference on a treatment indicator in linear models.

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Instacart
Oct 13, 2025, 9:49 PM
Data Scientist
Onsite
Machine Learning
4
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Regularization choices for modeling contribution per order (p=50)

Context: You are building a linear model for contribution per order (continuous outcome) with about p = 50 covariates that include:

  • Highly correlated marketing dummy variables (e.g., overlapping campaigns, channels)
  • Weather variables
  • Daypart indicators

Assume predictors are standardized and that a binary treatment indicator D (e.g., exposed vs. not exposed to a marketing action) is of substantive interest for inference.

Tasks

  1. Lasso vs. Ridge
  • Explain the bias–variance trade‑offs of L1 (Lasso) and L2 (Ridge).
  • Contrast their variable selection behavior under correlated groups of predictors.
  • Discuss how each affects uncertainty quantification for treatment effects, including best practices to avoid bias in the estimated treatment coefficient.
  1. Elastic Net and tuning for valid inference
  • Describe when Elastic Net strictly dominates using Lasso or Ridge alone in this setting.
  • Explain how you would tune α and λ via cross‑validation, and how to keep inference valid after model selection (e.g., post‑selection refitting, stability selection).
  1. Interactions and heterogeneity
  • Discuss how regularization interacts with collinearity when you include treatment×covariate interactions (D×X), and the risk of shrinking true heterogeneous effects to zero.

Solution

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