A/B tests (or randomized controlled experiments) play an integral role in the research and development cycles of technology companies. As in classic randomized experiments (e. g. , clinical trials), the underlying statistical analysis of A/B tests is based on assuming the randomization unit is independent and identically distributed (). However, the randomization mechanisms utilized in online A/B tests can be quite complex and may render this assumption invalid. Analysis that unjustifiably relies on this assumption can yield untrustworthy results and lead to incorrect conclusions. Motivated by challenging problems arising from actual online experiments, we propose a new method of variance estimation that relies only on practically plausible assumptions, is directly applicable to a wide of range of randomization mechanisms, and can be implemented easily. We examine its performance and illustrate its advantages over two commonly used methods of variance estimation on both simulated and empirical datasets. Our results lead to a deeper understanding of the conditions under which the randomization unit can be treated as In particular, we show that for purposes of variance estimation, the randomization unit can be approximated as when the individual treatment effect variation is small; however, this approximation can lead to variance under-estimation when the individual treatment effect variation is large.
Deng et al. (Thu,) studied this question.