Why use the t-statistic?
Company: Two Sigma
Role: Data Scientist
Category: Statistics & Math
Difficulty: hard
Interview Round: Technical Screen
In an A/B test or any mean-comparison setting, explain why the t-statistic is a useful measure.
Your answer should cover:
1. What the t-statistic measures.
2. Why it is more informative than looking only at the raw difference in means.
3. How it relates effect size, variance, and sample size.
4. The assumptions behind using it.
5. Situations where it can be misleading or where another method would be better.
Quick Answer: This question evaluates understanding of the t-statistic as a standardized test measure connecting effect size, variance, and sample size, and probes knowledge of inferential statistics, hypothesis testing, and the assumptions underlying t-tests in the Statistics & Math domain.