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TOPIC: HYPOTHESIS

What is a Hypothesis?
It is an informal/shrewd guess, a supposition, a hunch, an assumption, a
proposition or a tentative generalization of the existence of some facts, condition or
relationship relative to some phenomena to guide the research to new truth.
Sources of Hypothesis
1. Theory – Let us use the “Hierarchy of Needs” of Maslow. According to this theory,
higher needs come to play when the lower need is satisfied.
Ex. Hypothesis: In spiritually oriented people, Maslow’s “Hierarchy of Needs” does
not hold water
2. Observation – routine observations of price movement in the market, employee
behavior on/off the job, etc.
Ex. Hypothesis: The perfect attendance of an employee at work is not an indication
of his/her productivity
3. Intuition and personal experience – in certain cases, gut feeling may lead to
hypothesis. However, in many cases, years of experience of the researcher in the
field guides him or her to appropriate and meaningful hypothesis
Ex. Hypothesis: A bank employee, who has been a bank cashier for 20 years,
stated this hypothesis: Long holidays require banks to load their ATMs with adequate
supply of bank notes.
4. Analogies (Comparison) – hypothesis can be formed based on another area of
discipline.
Ex. Hypothesis: A professor in marketing stated this hypothesis: There will come a
point in a product life cycle that it will reach its saturation stage that the only direction
left is to go down. (Based on the theory of gravity in science by Isaac Newton – What
goes up, will come down
5. Review of Literature – habit of browsing through periodicals, abstracts, reviews
help in locating hypothesis
6. General culture – different cultures in society or within an organization is a great
source of hypothesis
Characteristics of Good Hypothesis
1. It is expressed in simple language without any ambiguity in meaning
2. It is specific and precise without creating any confusion
3. It is amenable for testing with empirical data
4. It is testable with reasonable time
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5. It is constructed with known facts and theory with specified scope

6. It is capable of predicting/anticipating previously unknown data
7. In relationship hypothesis, the relationship between variables must be stated
8. It provides answer to the problem which necessitated the research enquiry
Functions of Hypothesis
1. It specify sources of data which shall be collected, analyzed and interpreted to
answer a problem
2. It indicates the appropriate types of research as well as the research techniques
3. It may contribute to the development of theory. It links theory and investigation.
Types of Hypothesis
1. Descriptive Hypothesis – refers to propositions that typically state the existence,
size, form or distribution of some variable
Ex. Nearly 50% of current population of India is unemployed
2. Relational Hypothesis – a statement that describes the relationships among
variables with respect to some case
Ex. Americans perceive that Japanese cars are superior to American cars
a. Co-relational relationship – variable occurs in some specified manner
without implying that one causes the other, that is it cannot be claimed that one
variable is influence by another
Ex. In the banking industry, employees over 40 years are less productive than those
who are less than 40 years
b. Explanatory or Causal – This hypothesis claims that there is a cause and
effect relationship between variables, that is, one variable causes an effect on the
other variable.
Ex. An increase in family income leads to an increase in the percentage of
expenditure on sigh seeing.
3. Common sense Hypothesis – it represents common sense ideas of day to day
observations
Ex. Frequent outings with family reduces tension in the family
4. Complex Hypothesis – it is a hypothesis that is abstract and not easily
understood by ordinary people
Ex. Members of Asian minority groups in UK suffers from oppression psychosis
5. Null Hypothesis – denoted by the symbol Ho, it generally states that, “There is no
significant difference between X and Y”, “There is no effect of X on Y”, “There is no
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association between X and Y”. It is the hypothesis the researcher wishes to

disapprove
6. Alternative Hypothesis – denoted by the symbol AH, it states that, “There is a
difference between X and Y”, “There is an effect between X and Y”, “There is an
association between X and Y”. It is the hypothesis the researcher wishes to approve.
There are two kinds of AH – Directional and Non-Directional. It is the AH whish
decides whether the hypothesis is one tailed or two-tailed
If AH = U1 ≠ U2, it is a two tailed test
If AH = Ui > U2 or U1 < U2, its is one tailed
Examples:
Ho = There is no significant difference between the sale of Coke and Pepsi in India
AH =
a. Directional – Sales of coke is greater than sale of Pepsi or
- Sales of coke is lesser than sale of Pepsi
b. Non-Directional – There is a difference between the sale of coke and Pepsi
Hypothesis Testing
Testing a hypothesis depends on a test criterion (z-test, t-test, F-test, etc.)
Level of significance – it is a measure of the strength of the evidence that
must be present in a researcher’s sample before he will reject the null hypothesis
and conclude that the effect is statistically significant. It is denoted by alpha symbol
(α)
The significance level for a study is chosen before data collection, and is
typically set to 5% (0.05) or much lower—depending on the field of study. Level of
significance values can be any of the following: - α = 0.10, α = 0.05, α = 0.01
The researcher then, compare his p-value (probability value which is the
probability of obtaining test results at least as extreme as the results actually
observed during the test, assuming that the null hypothesis is correct) to the level of
significance.
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Types of Errors – Type I and Type II errors

Steps in hypothesis testing

1. State the null and alternative hypotheses. Ho is always used for statistical testing.
2. Choose the statistical test (X, t, F, Chi-square or ANOVA)
3. Select the desired level of significance. The most common is 0.05
4. Compute the calculated value using the appropriate test of significance.
5. Obtain the critical test value. The critical value is the criterion that defines the
region of rejection from the region of acceptance of the N.H.
6. Make the decision – If calculated value is > critical value = reject Ho and accept
AH
If calculated value is < critical value = accept Ho and reject
AH
Kinds/Sources of Data
1. Primary – questionnaire, financial statements, laws, interview, statistical data, etc.
2. Secondary – books, internet, magazines, newspaper, journals, etc.
3. Internal Data - sales journal, cash receipts and cash payment journal
Methods of Primary Data Collection
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1. Observation – systematic viewing of a phenomenon in its proper setting for the

purpose of gathering data for a particular study. It includes seeing, hearing and
perceiving. It may be participant, non-participant, direct or indirect, controlled
or uncontrolled.
2. Interviewing – a two-way systematic conversation between the researcher and
the respondent initiated for obtaining information relevant to a specific study. It
maybe structured or unstructured
3. Mail Survey – involves mailing the questionnaires to the respondents to get their
responses. It maybe postal or via e-mail
4. Experimentation – used to study the causal relationship between variables. It
aims to determine the effect of independent variable to dependent variable.
5. Simulation – process of conducting the experiment on a symbolic method
representing a phenomenon. It maybe man simulation, computer simulation,
man-computer simulation
6. Projective Techniques - are indirect and unstructured methods of investigation
which have been developed by the psychologists and use projection of respondents
for inferring about underline motives, urges or intentions which cannot be secure
through direct questioning as the respondent either resists to reveal them or is
unable to figure out himself. These techniques are useful in giving respondents
opportunities to express their attitudes without personal embarrassment. These
techniques help the respondents to project his own attitude and feelings
unconsciously on the subject under study.

END OF TOPIC