The problem statement is a concise description of the nature of the problem (the

discrepancy between what is and what should be) and of the size, distribution and
severity of the problem (who is affected, where, since when, and what are the
consequences).

You must also formalize your hypotheses in this section. By formalize, physically
distinguish your hypotheses from the rest of the text in two ways: (1) labeling them as
H1, H2, etc., and (2) underlining them. For example, you might say, "This leads to our
first hypothesis:

H1: “The greater the GNP per capita, the higher the literacy rate."

Hypotheses should be bold assertions of expectations that lend themselves to

falsification. They gain in credibility as they survive attempts to test them -- i.e., to
falsify them. Whenever possible, formulate directional hypotheses, which invite
falsification more readily than non-directional hypotheses.