Understanding Hypothesis Testing with Tulips

Since I was in high school, I started learning about hypothesis testing, p-values, null hypothesis, etc.

I remember that I grasped the concepts but for some reason, after a few months of the lesson I started to forget about it.

It was until I “re-learnt” them again on different stages of my education that I started to see the power of hypothesis testing — now at work I can clearly understand how valuable of a tool it is.

So now that I live in The Netherlands, I decided to explain these concepts with a story around Tulips and Tulipmania — Tulipmania was a speculative economic bubble that occurred in the Netherlands during the 17th century. It involved a frenzy of trading and skyrocketing prices for tulip bulbs, eventually leading to a dramatic collapse in the market.

The Context of the Story

Once upon a time, in a land known for its vibrant tulip fields, there existed a small village called Hypothetica.

The people of Hypothetica were known for their love of tulips, and they took great pride in cultivating the most beautiful and rarest varieties.

However, they also had a peculiar obsession with finding the perfect tulip bulb.