Track 8 · Hypothesis Testing · Lesson 10 of 14

Power and sample size

Explain what determines the power of a test, compute power for simple cases, and choose a sample size that gives adequate power before collecting data.

35 minIntermediate8 graded exercisesMembers

The checkout experiment and the independent-samples delivery study both ended “not significant”, although the synthetic data were built with real effects. Neither study was large enough to have a good chance of detecting them. Power analysis is how you find that out before spending two weeks of traffic or a month of deliveries.

Power is the probability that a test rejects H0 when a specific alternative is true — the chance of detecting an effect of a given size. It depends on four things:

  1. Effect size: bigger true effects are easier to detect.
  2. Variability (σ): noisier data hide effects.
  3. Sample size (n): the standard error shrinks like 1/n1/\sqrt{n}.
  4. Significance level (α) and sidedness: a stricter α, or a two-sided test, makes rejection harder.

By convention studies aim for power of at least 0.80 (often 0.90). Fixing three of the quantities determines the fourth — most often we fix the effect worth detecting, σ, α and the target power, and solve for n.

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It has 8 graded exercises with feedback, hints and worked solutions. After it you will be able to:

  • Name the four drivers of power: effect size, variability, sample size and α
  • Compute the power of a z-test and the sample size for a target power
  • Use a power calculator for t-tests and two-proportion tests before collecting data
  • Explain why post-hoc “observed power” is uninformative and the confidence interval is not