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24 Cards in this Set
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What is a pvalue? 
The pvalue is defined as the probability of observing a result equal to or "more extreme" than abs(t) where t is a statistic is a standardized value that is calculated from sample data. In regression parameter calculations, A small p value indicates it is unlikely to observe such a strong association between the predictor and the response variable due to chance. 

When is pvalue used?

The pvalue is widely used in statistical hypothesis testing, specifically in null hypothesis significance testing. In this method, as part of experimental design, before performing the experiment, one first chooses a model (the null hypothesis) and a threshold value for p, called the significance level of the test, traditionally 5% or 1% [6] and denoted as α. If the pvalue is less than or equal to the chosen significance level (α), the test suggests that the observed data is inconsistent with the null hypothesis, so the null hypothesis must be rejected. However, that does not prove that the tested hypothesis is true. When the p value is calculated correctly, this test guarantees that the Type I error rate is at most α. For typical analysis, using the standard α = 0.05 cutoff, the null hypothesis is rejected when p <= .05 and not rejected when p > .05.


What is a hypothesis test?

A hypothesis test is a statistical test that is used to determine whether there is enough evidence in a sample of data to infer that a certain condition is true for the entire population. A hypothesis test examines two opposing hypotheses about a population: the null hypothesis and the alternative hypothesis.


Give an example of a hypothesis test.

For example, let’s say we’d like to test the assumption that men are taller than and women at the Galvanize campuses.


Provide necessary steps to arrive at an answer with a hypothesis test.

Steps: 1) State the null and alternate hypotheses. 2) Calculate the t (or z) statistic. 3) Using the t value and the degrees of freedom, find the corresponding probability p. 4) Compare p to the desired Type I error rate, alpha. 5) State the conclusion.


What is the null hypothesis?

The null hypothesis(typically described as H0) is that the average heights of the men and women are not significantly different, while the alternate hypotheses (H1 or Ha) is that men are taller than women.


What is the t statistic?

The tvalue quantifies how big the difference in the means is compared tvariation in the data. It’s basically the difference in the means quantified in multiples of the standard error.


How does p value relate to the tails of the test?

Based on the alternate hypothesis, a decision about using a single tailed probability (as in this case for greather than ) or a doubletailed probability (means not equal) is desired to get the right value of p.


What is Alpha?

The significance level, is typically 0.025 to 0.05 for a 95% confidence level for in double and single sided tests, respectively. If p <= alpha, the null hypothesis can be rejected, otherwise it can’t.


What is statistical power?

Statistical power is the likelihood that a study will detect an effect when an effect exists (or, that a false null hypothesis will be rejected). Statistical power is inversely related to the probability of making a Type II error (β). Power = 1 – β. As statistical power increases the probability of making a Type II error (a false negative) decreases. Though there is no formal standard for power, (1β) = 0.8 is often used.


What affects statistical power?

Generally statistical power depends on the desired significance criterion, the magnitude of the effect of interest in the population (effect size), and the sample size used to detect the effect. Increasing the sample size is often the easiest way to increase the power. Many formulae exist for determining the correct sample size for a desired statistical power, depending on the application.


Give examples where the median is a better measure of centrality than the mean.

The median is a better measure than the mean when data are skewed. The median is a better measure in cases where outliers shift the centrality of the mean.


What is A/B testing?

A/B testing is: Twosample hypothesis testing, Randomized exposure of test subjects to two variants: A and B, where A is control, B is the variation


Give a couple of examples where A/B testing might be used.

For example, In website design, A/B testing will determine if changes to the website changed (hopefully increased) the click through rate. In the case of marketing materials, A/B testing would be used where a letter to a prospective customer will end with either “Sale ends March 8, use discount code M8 online to claim” or “Sale ends soon, use code SL to claim”


What type of distribution models the period of time between events occurring at an average rate (assuming each event occurs independently of the last event)?

The exponential distribution.


Give a couple real life examples that would be modeled by the exponential distribution.

For example, the probability that you’ll get a phone call in the next hour given you get a call on average once every 4 hours and, the probability someone will pass you at a street corner in the next five minutes given that 10 people walk by that street corner every hour.


What are common methods for dealing with missing data?

Common imputation methods of dealing with unknown or missing values include:
Removing entire observations containing one or more unknown values. Advantage: easy; Disadvantage: decreasing power and losing data; Filling in unknown values with the average of the existing values (mean imputation). Advantage: easy; Disadvantage: diminishes utility of correlations that use the variable that’s imputed; knearestneighbors: Use the values of clustered neighbors to to fill in missing data points. Advantage: more representative; Disadvantage: more computationally expensive 

What is the Central Limit Theorem?

The CLT states that the arithmetic mean of a sufficiently large number of iterates of independent random variables will be approximately normally distributed regardless of the underlying distribution. i.e: the sampling distribution of the sample mean is normally distributed.


Where is the Central Limit theorem often employed in data science?

The CLT is used in hypothesis testing and confidence intervals. The process of bootstrapping is like the process of sampling for the CLT but can be used to generate statistics other than the mean.


Contrast Frequentist and Bayesian statistics.

In a Frequentist framework, there are true fixed parameters that describe a population. In a Bayesian framework, distributions are associated with parameters that describe the population.


Explain how determining the average height of adult women in the US would be approached by these two paradigms.

Frequentist: there is one true answer to this (e.g 5’ 7”). Now when this population is sampled, that’s where probability and confidence intervals enter the picture.
Bayesian: start with a “prior” distribution that describes his/her present state of knowledge (say that the height of women follows a normal distribution centered on 5’ 6” with a standard deviation of 6”). Then the Bayesian would collect data. This data would be used to update the prior distribution to get a new distribution – the posterior distribution. Statements about probability and confidence intervals reference this posterior distribution. 

Explain Bayes rule in words and then write out its formula.

In probability theory and statistics, Bayes' theorem (alternatively Bayes' law or Bayes' rule) describes the probability of an event, based on conditions that might be related to the event
P(AB) = P(BA) * P(A) / P(B) 

What are the terms of Bayes formula.

P(A) and P(B) are the probabilities of events A and B without regard to each other.
P(BA) is the probability of event B occuring given that event A occurred. P(AB) is the probability of event A occurring given that event B occurred. It’s what we are trying to find. 

What are the terms called in Bayes formula.

P(BA) is the “likelihood.”, P(A) is the “prior.”, P(B) is the “normalizing constant”, sometimes referred to as the “evidence."P(AB) is the “posterior.”
