Hi,
I'm designing a methodology to track the effects of a price test at work, and I'm curious to know whether there are limits on how many strata I can use in a sample or on how many subjects need to be in each strata.
For context, we're taking about 80-120 products (the exact number will depend on what we wind up having good data for) and applying a new pricing algorithm to one half of them, selected at random. Then, we'll apply a differences-in-differences model to determine whether and to what degree our test group was more profitable than our control.
We have a wealth of information on these products' past performance and I'd like to use it to stratify our sample and shrink our confidence intervals a bit. In my imagination, I could stratify these products on a number of dimensions until I have strata containing no more than 2 to 6 products.
I never see such low-level stratification used in studies that I've reviewed, however, so I ask, is there any statistical drawback to creating such small strata, or are other conditions just preventing other researchers from being so thorough?
Thanks so much!
I'm designing a methodology to track the effects of a price test at work, and I'm curious to know whether there are limits on how many strata I can use in a sample or on how many subjects need to be in each strata.
For context, we're taking about 80-120 products (the exact number will depend on what we wind up having good data for) and applying a new pricing algorithm to one half of them, selected at random. Then, we'll apply a differences-in-differences model to determine whether and to what degree our test group was more profitable than our control.
We have a wealth of information on these products' past performance and I'd like to use it to stratify our sample and shrink our confidence intervals a bit. In my imagination, I could stratify these products on a number of dimensions until I have strata containing no more than 2 to 6 products.
I never see such low-level stratification used in studies that I've reviewed, however, so I ask, is there any statistical drawback to creating such small strata, or are other conditions just preventing other researchers from being so thorough?
Thanks so much!