diff --git a/.gitignore b/.gitignore
new file mode 100644
index 0000000..9be5464
--- /dev/null
+++ b/.gitignore
@@ -0,0 +1,114 @@
+# Byte-compiled / optimized / DLL files
+__pycache__/
+*.py[cod]
+*$py.class
+
+# C extensions
+*.so
+
+# Distribution / packaging
+.Python
+build/
+develop-eggs/
+dist/
+downloads/
+eggs/
+.eggs/
+lib/
+lib64/
+parts/
+sdist/
+var/
+wheels/
+pip-wheel-metadata/
+share/python-wheels/
+*.egg-info/
+.installed.cfg
+*.egg
+MANIFEST
+
+# PyInstaller
+*.manifest
+*.spec
+
+# Installer logs
+pip-log.txt
+pip-delete-this-directory.txt
+
+# Unit test / coverage reports
+htmlcov/
+.tox/
+.nox/
+.coverage
+.coverage.*
+.cache
+nosetests.xml
+coverage.xml
+*.cover
+*.py,cover
+.hypothesis/
+.pytest_cache/
+
+# Jupyter Notebook
+.ipynb_checkpoints
+
+# IPython
+profile_default/
+ipython_config.py
+
+# pyenv
+.python-version
+
+# pipenv
+Pipfile.lock
+
+# Poetry
+poetry.lock
+
+# PEP 582
+__pypackages__/
+
+# Celery
+celerybeat-schedule
+celerybeat.pid
+
+# SageMath parsed files
+*.sage.py
+
+# Environments
+.env
+.venv
+env/
+venv/
+ENV/
+env.bak/
+venv.bak/
+
+# Spyder project settings
+.spyderproject
+.spyproject
+
+# Rope project settings
+.ropeproject
+
+# mkdocs documentation
+/site
+
+# mypy
+.mypy_cache/
+.dmypy.json
+dmypy.json
+
+# Pyre type checker
+.pyre/
+
+# IDEs
+.idea/
+.vscode/
+*.swp
+*.swo
+*~
+.DS_Store
+
+# Claude settings
+.claude/*
\ No newline at end of file
diff --git a/pyproject.toml b/pyproject.toml
new file mode 100644
index 0000000..dca8a27
--- /dev/null
+++ b/pyproject.toml
@@ -0,0 +1,116 @@
+[tool.poetry]
+name = "lightweight_mmm"
+version = "0.1.9"
+description = "Package for Media-Mix-Modelling"
+authors = ["Google LLC <no-reply@google.com>"]
+license = "Apache-2.0"
+readme = "README.md"
+homepage = "https://github.com/google/lightweight_mmm"
+repository = "https://github.com/google/lightweight_mmm"
+classifiers = [
+    "Development Status :: 3 - Alpha",
+    "Intended Audience :: Developers",
+    "Intended Audience :: Science/Research",
+    "License :: OSI Approved :: Apache Software License",
+    "Topic :: Scientific/Engineering :: Mathematics",
+    "Programming Language :: Python :: 3.8",
+    "Programming Language :: Python :: 3.9",
+    "Programming Language :: Python :: 3.10",
+    "Programming Language :: Python :: 3.11",
+    "Programming Language :: Python :: 3.12"
+]
+packages = [{include = "lightweight_mmm"}]
+
+[tool.poetry.dependencies]
+python = "^3.8"
+absl-py = "*"
+arviz = ">=0.11.2"
+immutabledict = ">=2.0.0"
+jax = ">=0.3.18"
+jaxlib = ">=0.3.18"
+matplotlib = "==3.6.1"
+numpy = ">=1.21.0"
+numpyro = ">=0.9.2"
+pandas = ">=1.1.5"
+scipy = "*"
+seaborn = "==0.11.1"
+scikit-learn = "*"
+statsmodels = ">=0.13.0"
+tensorflow = ">=2.7.2"
+
+[tool.poetry.group.dev.dependencies]
+pytest = "^7.4.0"
+pytest-cov = "^4.1.0"
+pytest-mock = "^3.11.1"
+pytest-xdist = "^3.3.1"
+
+[tool.poetry.scripts]
+test = "pytest:main"
+tests = "pytest:main"
+
+[tool.pytest.ini_options]
+minversion = "7.0"
+testpaths = ["tests"]
+addopts = [
+    "-ra",
+    "--strict-markers",
+    "--cov=lightweight_mmm",
+    "--cov-report=term-missing:skip-covered",
+    "--cov-report=html",
+    "--cov-report=xml",
+    "--cov-fail-under=80",
+    "-vv",
+    "--tb=short",
+    "--maxfail=3"
+]
+python_files = ["test_*.py", "*_test.py"]
+python_classes = ["Test*"]
+python_functions = ["test_*"]
+markers = [
+    "unit: marks tests as unit tests (fast, isolated)",
+    "integration: marks tests as integration tests (may be slower)",
+    "slow: marks tests as slow (deselect with '-m \"not slow\"')"
+]
+filterwarnings = [
+    "ignore::DeprecationWarning",
+    "ignore::PendingDeprecationWarning"
+]
+
+[tool.coverage.run]
+source = ["lightweight_mmm"]
+branch = true
+omit = [
+    "*/tests/*",
+    "*/__pycache__/*",
+    "*/conftest.py",
+    "*/setup.py",
+    "*/.venv/*",
+    "*/venv/*"
+]
+
+[tool.coverage.report]
+exclude_lines = [
+    "pragma: no cover",
+    "def __repr__",
+    "if self.debug:",
+    "if __name__ == .__main__.:",
+    "raise AssertionError",
+    "raise NotImplementedError",
+    "if 0:",
+    "if False:",
+    "class .*\\bProtocol\\):",
+    "@(abc\\.)?abstractmethod"
+]
+show_missing = true
+precision = 2
+fail_under = 80
+
+[tool.coverage.html]
+directory = "htmlcov"
+
+[tool.coverage.xml]
+output = "coverage.xml"
+
+[build-system]
+requires = ["poetry-core>=1.0.0"]
+build-backend = "poetry.core.masonry.api"
\ No newline at end of file
diff --git a/tests/__init__.py b/tests/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/tests/conftest.py b/tests/conftest.py
new file mode 100644
index 0000000..1c17851
--- /dev/null
+++ b/tests/conftest.py
@@ -0,0 +1,119 @@
+"""Shared pytest fixtures and configuration for lightweight_mmm tests."""
+
+import os
+import tempfile
+from pathlib import Path
+from typing import Generator
+
+import numpy as np
+import pandas as pd
+import pytest
+
+
+@pytest.fixture
+def temp_dir() -> Generator[Path, None, None]:
+    """Create a temporary directory for test files."""
+    with tempfile.TemporaryDirectory() as temp_dir:
+        yield Path(temp_dir)
+
+
+@pytest.fixture
+def mock_data():
+    """Create mock data for testing MMM models."""
+    np.random.seed(42)
+    n_time_periods = 52
+    n_media_channels = 3
+    n_geos = 2
+    
+    # Generate synthetic data
+    data = {
+        'date': pd.date_range('2023-01-01', periods=n_time_periods, freq='W'),
+        'sales': np.random.poisson(1000, n_time_periods) + np.random.normal(0, 50, n_time_periods),
+    }
+    
+    # Add media spend data
+    for i in range(n_media_channels):
+        data[f'media_{i}'] = np.random.exponential(1000, n_time_periods)
+    
+    # Add geo data
+    for i in range(n_geos):
+        data[f'geo_{i}_sales'] = np.random.poisson(500, n_time_periods)
+    
+    return pd.DataFrame(data)
+
+
+@pytest.fixture
+def mock_config():
+    """Create a mock configuration dictionary."""
+    return {
+        'n_media_channels': 3,
+        'n_geos': 2,
+        'model_type': 'adstock',
+        'priors': {
+            'intercept': {'mean': 0, 'std': 1},
+            'coef_media': {'mean': 0, 'std': 0.1},
+        },
+        'hyperparameters': {
+            'learning_rate': 0.001,
+            'n_iterations': 1000,
+            'batch_size': 32,
+        }
+    }
+
+
+@pytest.fixture
+def sample_media_data():
+    """Generate sample media spend data."""
+    np.random.seed(123)
+    return np.random.rand(52, 3) * 10000  # 52 weeks, 3 channels
+
+
+@pytest.fixture
+def sample_target_data():
+    """Generate sample target (sales) data."""
+    np.random.seed(123)
+    base_sales = 10000
+    trend = np.linspace(0, 1000, 52)
+    seasonality = 500 * np.sin(np.linspace(0, 4 * np.pi, 52))
+    noise = np.random.normal(0, 200, 52)
+    return base_sales + trend + seasonality + noise
+
+
+@pytest.fixture(autouse=True)
+def reset_random_seed():
+    """Reset random seeds before each test for reproducibility."""
+    np.random.seed(42)
+    import random
+    random.seed(42)
+    
+    # Reset JAX random seed if JAX is available
+    try:
+        import jax
+        jax.random.PRNGKey(42)
+    except ImportError:
+        pass
+
+
+@pytest.fixture
+def mock_model_params():
+    """Create mock model parameters."""
+    return {
+        'intercept': np.array([1000.0]),
+        'coef_media': np.array([0.1, 0.2, 0.15]),
+        'coef_trend': np.array([10.0]),
+        'saturation_parameters': {
+            'alphas': np.array([2.0, 1.5, 2.5]),
+            'betas': np.array([0.5, 0.6, 0.4])
+        },
+        'adstock_parameters': {
+            'convolve_window': 3,
+            'decay_rates': np.array([0.3, 0.4, 0.35])
+        }
+    }
+
+
+@pytest.fixture
+def capture_logs(caplog):
+    """Fixture to capture and assert log messages."""
+    with caplog.at_level('DEBUG'):
+        yield caplog
\ No newline at end of file
diff --git a/tests/integration/__init__.py b/tests/integration/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/tests/test_setup_validation.py b/tests/test_setup_validation.py
new file mode 100644
index 0000000..8370398
--- /dev/null
+++ b/tests/test_setup_validation.py
@@ -0,0 +1,86 @@
+"""Validation tests to verify testing infrastructure is set up correctly."""
+
+import pytest
+
+
+class TestInfrastructureSetup:
+    """Test class to validate the testing infrastructure."""
+    
+    @pytest.mark.unit
+    def test_pytest_installed(self):
+        """Verify pytest is available."""
+        import pytest
+        assert pytest.__version__
+    
+    @pytest.mark.unit
+    def test_coverage_installed(self):
+        """Verify pytest-cov is available."""
+        import pytest_cov
+        assert pytest_cov
+    
+    @pytest.mark.unit
+    def test_mock_installed(self):
+        """Verify pytest-mock is available."""
+        import pytest_mock
+        assert pytest_mock
+    
+    @pytest.mark.unit
+    def test_fixtures_available(self, temp_dir, mock_data, mock_config):
+        """Verify custom fixtures are available and working."""
+        # Test temp_dir fixture
+        assert temp_dir.exists()
+        assert temp_dir.is_dir()
+        
+        # Test mock_data fixture
+        assert mock_data is not None
+        assert len(mock_data) == 52  # 52 weeks of data
+        assert 'sales' in mock_data.columns
+        assert 'media_0' in mock_data.columns
+        
+        # Test mock_config fixture
+        assert isinstance(mock_config, dict)
+        assert 'n_media_channels' in mock_config
+        assert mock_config['n_media_channels'] == 3
+    
+    @pytest.mark.unit
+    def test_markers_defined(self, request):
+        """Verify custom markers are defined."""
+        markers = request.config.getini('markers')
+        marker_names = [m.split(':')[0].strip() for m in markers]
+        assert 'unit' in marker_names
+        assert 'integration' in marker_names
+        assert 'slow' in marker_names
+    
+    @pytest.mark.integration
+    def test_integration_marker(self):
+        """Test that integration marker works."""
+        assert True
+    
+    @pytest.mark.slow
+    def test_slow_marker(self):
+        """Test that slow marker works."""
+        import time
+        time.sleep(0.1)  # Simulate slow test
+        assert True
+    
+    def test_project_structure(self):
+        """Verify the project structure is accessible."""
+        from pathlib import Path
+        
+        project_root = Path(__file__).parent.parent
+        assert project_root.exists()
+        assert (project_root / 'lightweight_mmm').exists()
+        assert (project_root / 'pyproject.toml').exists()
+        assert (project_root / 'tests').exists()
+        assert (project_root / 'tests' / 'conftest.py').exists()
+
+
+def test_basic_assertion():
+    """Basic test to ensure pytest runs."""
+    assert 1 + 1 == 2
+
+
+def test_fixture_usage(sample_media_data, sample_target_data):
+    """Test that fixtures from conftest.py are accessible."""
+    assert sample_media_data.shape == (52, 3)
+    assert len(sample_target_data) == 52
\ No newline at end of file
diff --git a/tests/unit/__init__.py b/tests/unit/__init__.py
new file mode 100644
index 0000000..e69de29