Suppose in your control group, users generated an average of $100 in revenue (numerator) across an average of 4.0 sessions (denominator), with a numerator variance of 40,000, a denominator variance of 3.0, and a covariance between them of 250, across 15,000 users. In your test group, users generated an average of $108 in revenue across an average of 4.075 sessions, with a numerator variance of 42,000, a denominator variance of 3.1, and a covariance of 260, across 15,000 users.
- Baseline ratio, control
- 25.00
- Standard deviation, control
- 42.848
- Number of observations, control
- 15,000
- Baseline ratio, test
- 26.503
- Standard deviation, test
- 42.784
- Number of observations, test
- 15,000
- Significance level (α)
- 0.05
- Tails
- Two-sided
- Variance
- Unequal (default)
The delta method turns those moments into a control ratio of $25.00 with a standard deviation of 42.848, and a test ratio of $26.503 with a standard deviation of 42.784 — the two numbers above that nothing but the delta method produces. The test then yields an absolute difference of +$1.503 and a lift of +6.01%, with a z-statistic of 3.0402 and a p-value of 0.0024, which is below α = 0.05. The 95% confidence interval for the absolute difference is [0.5341, 2.4721], and for the lift is [2.09%, 10.08%].
Since the p-value is below α, the result is statistically significant: there is sufficient evidence of a difference between the groups that is unlikely to be due to chance alone. Since the observed effect favors the test version, you could consider moving forward with implementation.