Hidden variables are factors that are not directly observed but can influence the outcomes of a system or experiment. In the context of physics, particularly in quantum mechanics, hidden variables are proposed to explain the randomness of certain phenomena. For example, the behavior of particles like electrons may seem unpredictable, but hidden variables could provide underlying reasons for their behavior. In statistics, hidden variables can refer to unmeasured factors that affect the relationship between observed variables. For instance, in a study examining the link between exercise and health, a hidden variable like diet might also play a significant role, potentially skewing the results if not accounted for.