Type 1 and Type 2 Errors in A/B Testing: Definition & How to Avoid Them

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A/B testing is a marketer’s go-to for optimizing websites, apps, and other digital experiences. But even with all the excitement of hypothesis testing, errors can creep in.

Two of the biggest culprits? Type 1 and type 2 errors.

These statistical blunders can lead you down the wrong path, resulting in costly mistakes or missed opportunities.

In this article, we’ll break down what these two errors are, why they matter, and how you can avoid them in your A/B testing efforts.

Let’s get started!

What is a type 1 error (false positive)?

A type I error (also known as a false positive) happens when you reject the null hypothesis, even though it’s true. In simpler terms, you think your A/B test found a significant difference between your variations when, in reality, there isn’t one.

Imagine testing a new feature on your app. Your A/B test suggests the new feature boosts user engagement, but in reality, the feature has no impact at all. You’ve detected an effect that doesn’t exist.

Type I errors are dangerous because they can lead you to make changes based on false conclusions.

You might invest resources in rolling out new features or marketing strategies, only to later discover they don’t actually work. Worse yet, your overall decision-making can become skewed, affecting future tests and strategies.

What is a type 2 error (false negative)?

A type II error (also known as a false negative result) happens when you fail to reject the null hypothesis when it’s false. In this case, you overlook a real effect or difference in your A/B test result.

Let’s say you’re testing a new checkout process, but your A/B test result indicates no improvement over the existing process. However, in reality, the new process does improve conversion rates—you just didn’t detect it.

Type II errors mean missed opportunities. You could be sitting on a goldmine of actionable insights but never realize it. This can lead to stagnation in your optimization efforts, preventing you from making meaningful changes that could positively impact your business.

Type 1 error vs. type 2 error: which is worse?

The answer depends on your context. Type 1 errors often lead to wasted time and resources, while type 2 errors result in missed opportunities.

In industries like medicine, where false positives can lead to incorrect treatments, avoiding type 1 errors is critical.

However, in marketing, a type 2 error might mean missing out on a winning strategy. The key is to find a balance between both types of errors to make informed decisions.

What are the key factors influencing type 1 and type 2 errors?

Both types of errors are influenced by several factors in your A/B testing setup. Understanding these factors will help you better design your experiments and reduce the chances of falling into these statistical traps.

1. Significance level (alpha)

The significance level, denoted by alpha (α), is the threshold at which you decide whether to reject the null hypothesis.

In most A/B tests, alpha is set at 0.05, meaning you’re willing to accept a 5% chance of committing a type 1 error. Lowering your alpha to 0.01, for example, reduces this risk, but at the cost of increasing your likelihood of committing a type 2 error.

Key takeaway: The lower your alpha, the less likely you are to commit a type 1 error, but the higher the risk of missing real effects (type 2 errors).

2. Power of the test (1 – beta)

The power of a statistical test refers to its ability to detect a real effect when one exists.

A higher power reduces the probability of committing a type II error. Factors like sample size, effect size, and variance all influence statistical power.

Key takeaway: The more power your test has, the less likely you will miss a meaningful test result.

How to avoid type 1 errors?

Let’s dive into the strategies for minimizing type 1 errors and making sure you’re not acting on false positives.

1. Set an appropriate alpha level

Choosing the right alpha level depends on your context. For example, in medical research, where the consequences of type 1 errors are serious, a lower alpha (e.g., 0.01) is more appropriate.

In contrast, digital marketers might be more comfortable with a standard alpha of 0.05, since the cost of a false positive may not be as severe.

Pro tip: If you want to play it safe, consider lowering your alpha, but be mindful of the trade-offs.

2. Use proper experimental design

A well-designed experiment is your first line of defense against type 1 errors.

Ensure that your sample is randomized and variables are controlled. Proper randomization helps prevent biases from creeping in and skewing your results.

Pro tip: Replication is key. Running your test more than once can confirm whether your findings are real or just flukes.

3. Apply multiple testing corrections

If you’re testing multiple variations at once, your chances of committing a type 1 error increase.

Techniques like the Bonferroni correction adjust for this, ensuring your significance level remains accurate despite multiple comparisons.

How to avoid type 2 errors?

Now, let’s focus on strategies to avoid the flip side—type 2 errors.

1. Increase sample size

Larger sample sizes help reduce the probability of committing a type II error. They reduce variability in your data, which increases the power of your test.

This means you’re more likely to detect true differences when they exist.

Pro tip: Conduct a power analysis before you run your test to determine the ideal sample size needed for reliable results.

2. Choose the right test

Different statistical tests work best with different types of data. Using the wrong test can increase your chances of committing a type 2 error by not detecting a true effect.

Make sure you’re using the appropriate test based on your data and assumptions.

Pro tip: Consult a statistician or use online tools to confirm that you’re using the right statistical test for your specific A/B test setup.

3. Boost effect size and reduce variability

You can also increase the chances of detecting an effect by boosting the effect size itself. For example, if you’re testing a minor tweak to your product, the effect size might be too small to detect.

Try testing stronger interventions or changes to see clearer results.

Balancing type 1 and type 2 errors

When designing an A/B test, you’re walking a tightrope between type 1 and type 2 errors. It’s important to recognize that reducing one type of error often increases the other.

If you’re too cautious and set your alpha too low (say, 0.01), you might miss out on real, actionable insights, particularly if your experiment has a small effect size. This is where type 2 errors come in—you fail to spot a meaningful change, which could hold back growth or improvements.

On the other hand, if your alpha is too high (say, 0.10), you’re more likely to act on changes that aren’t truly impactful, leading to wasted time, effort, and resources.

For example, in ecommerce testing, committing a type 1 error might mean pushing a product redesign that doesn’t actually enhance user experience, potentially losing customers.

A type 2 error, though, might mean missing out on a minor but meaningful improvement that could increase conversion rates by a small, yet profitable, percentage.

Both situations can be damaging, but the real impact depends on your business context.

Finding the right balance between these two types of errors requires a clear understanding of your goals and the potential costs of each error.

In some scenarios, the consequences of a type 1 error are far greater than those of a type 2 error, while in others, it’s the opposite.

  • High-stakes scenarios: In fields like medicine or finance, where false positives could lead to serious harm (e.g., approving a drug that doesn’t work or making a risky investment decision), the focus should be on minimizing type 1 errors. You want to be absolutely sure that any detected effect is real, even if it means you might miss a few promising alternatives (i.e., committing more type 2 errors). Here, a lower alpha, like 0.01 or even 0.001, is appropriate to reduce the chance of making a costly mistake.
  • Action-oriented scenarios: On the other hand, in marketing, ecommerce, or other consumer-focused industries, the cost of a type 1 error may be less severe than the opportunity cost of a type 2 error. For example, if you’re A/B testing a landing page design, a false positive might lead to a less-than-optimal design, but a false negative could mean missing out on a conversion boost. In these cases, optimizing for actionability might mean accepting a slightly higher risk of type 1 errors (e.g., using an alpha of 0.05 or 0.10) to ensure you’re not overlooking valuable opportunities.

Your approach to balancing type 1 and type 2 errors should always be informed by the specific context of your A/B test. 

Consider factors like:

  • Risk tolerance: How much risk are you willing to take? If the consequences of implementing a false positive are relatively minor, you might prioritize avoiding type 2 errors. If the stakes are high, reducing type 1 errors should be your focus.
  • Effect size: If you expect a large effect from the changes you’re testing, you might be more willing to risk a type 1 error since a larger effect will be easier to detect, even with a more conservative alpha.
  • Sample size: Larger sample sizes can help reduce both type 1 and type 2 errors, as they provide more data to detect real effects. When you can afford a bigger sample, you might be able to set a lower alpha without compromising too much on the risk of missing a real effect.

Wrapping up

In A/B testing, type 1 and type 2 errors are inevitable, but they don’t have to derail your optimization efforts.

By understanding what they are and how to avoid such errors, you can improve the accuracy of your experiments and make data-driven decisions with confidence.

Keep refining your approach, and remember that careful planning, the right sample size, and thoughtful hypothesis-testing strategies will keep you ahead of the curve.