Study Guide For Mid Term

What is a good hypothesis? *

• Testability - hypothesis is testable if there is a possibility of deciding whether it is true or
false based on experimentation by anyone.
• Parsimony – discouraging the postulation of excessive number of entities
• Scope – hypothesis can be applied to multiple cases of phenomena
• Fruitfulness – the prospect that the hypothesis may explain further phenomena in future
• Conservatism – the degree of “fit” with existing recognized knowledge systems
Selection bias*
• Selection bias is the bias introduced by the selection of individuals, groups, or data for
analysis in such a way that proper randomization is not achieved, thereby failing to
ensure that the sample obtained is representative of the population intended to be
analyzed.
• For example, low-income individuals self select into studies with high financial incentive
• You can never remove selection bias, you can always mitigate it through randomization
• Too much selection bias affect results
What is a research design?
 A framework or blueprint or strategy or plan for conducting the marketing
research project
 Exploratory and Conclusive research design

Advantage of Qualitative Research Disadvantages of Qualitative

Research

Except for ethnography, data can be collected relatively Lack of generalizability

quickly, and often at a lower cost, or may already exist as
naturally occurring conversations or behavior on the
Internet

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 Richness of data Difficulty in estimating the
magnitude of phenomena being
investigate

Accuracy of recording marketplace behaviors (validity) Low reliability

Preliminary insights into building models and scale Difficulty finding well-trained
measurements investigators, interviewers, and
observers

Insights from qualitative researchers with training in social Reliance on subjective

and behavioral sciences interpretive skills of qualitative
researcher

Descriptive research design is a type of research design that aims to obtain information to
systematically describe a phenomenon, situation, or population. More specifically, it helps
answer the what, when, where, and how questions regarding the research problem, rather than
the why.
Characteristics
 Descriptive research involves the collection of quantifiable and systematic data
that can be used for the statistical analysis of the research problem.
 As the descriptive research design often employs the use of surveys, data can be
collected from a very large sample size in a quick and cost-effective way.
 Descriptive research often employs the use of quantitative and qualitative research
in amalgamation, providing a more holistic understanding of the research topic.
 Results obtained through the descriptive method of research often have high
external validity as research is conducted in the respondent’s natural environment
and no variables are manipulated.

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Types of variables
Continuous variable is a variable whose value is obtained by measuring, i.e., one which
can take on an uncountable set of values.
Discrete variable if and only if there exists a one-to-one correspondence between this
variable and, the set of natural numbers.
Nominal variable A nominal variable is one that describes a name, label or category
without natural order. (Order doesn’t matter)
Ordinal variable An ordinal variable is a variable whose values are defined by an order
relation between the different categories. (Order matters)

Correlation
a number between -1 and +1 denoting the strength of the relationship between two
variables
Scatterplot: A scatter plot (aka scatter chart, scatter graph) uses dots to represent values
for two different numeric variables.
Causal Research Design
Causal research, also known as explanatory research or causal-comparative research,
identifies the extent and nature of cause-and-effect relationships between two or more
variables.

It is important to meet the conditions of causality

Covariation – X and Y should covary
Temporal sequence – X must occur before Y
Non-spuriousness – no third variable should influence X and Y

Steps to conduct causal research design

1. Define the purpose of your research

What questions do you have? What do you expect to come out of your research? Think
about which variables you need to test out the theory.

2. Pick a random sampling if participants are needed

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 Using a technology solution to support your sampling, like a database, can help you
define who you want your target audience to be, and how random or representative they
should be.

3. Set up the controlled experiment

Once you’ve defined which variables you’d like to measure to see if they interact, think
about how best to set up the experiment. This could be in-person or in-house via
interviews, or it could be done remotely using online surveys.
4. Carry out the experiment

Make sure to keep all irrelevant variables the same, and only change the causal variable
(the one that causes the effect) to gather the correct data. Depending on your method, you
could be collecting qualitative or quantitative data, so make sure you note your findings
across each regularly.

5. Analyze your findings

Either manually or using technology, analyze your data to see if any trends, patterns or
correlations emerge. By looking at the data, you’ll be able to see what changes you might
need to do next time, or if there are questions that require further research.

6. Verify your findings

Your first attempt gives you the baseline figures to compare the new results to. You can
then run another experiment to verify your findings.

Experimental design
In its simplest form, an experiment aims at predicting the outcome by introducing a
change of the preconditions, which is represented by one or more independent variables

The change in one or more independent variables is generally hypothesized to result in a

change in one or more dependent variables

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T-test
A t-test is a type of inferential statistic used to determine if there is a significant
difference between the means of two groups, which may be related in certain features.

a t-test allows us to compare the average values of the two data sets and determine if they
came from the same population.

Null hypothesis: both groups have same mean values

T-test assumptions
1. The assumption for a t-test is that the scale of measurement applied to the data
collected follows a continuous or ordinal scale, such as the scores for an IQ test.

2. The data is collected from a representative, randomly selected portion of the total
population.

3. Data, when plotted, results in a normal distribution, bell-shaped distribution curve.

4. A reasonably large sample size is used.

Category* Objective Example Methodology

Question

Descriptive Summarize data What happened? Aggregation, visualization, summary

statistics

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 Diagnostic Find reasons for past Why did it Drill-down analysis, correlation,
events happen? regression analysis

Predictive Forecast future What will Machine learning, forecasting models

events happen?

Prescriptive Optimize decision- What should we Simulation, optimization models,

making do? decision analysis

Correlation analysis
Correlation analysis: Correlation analysis is used to examine the relationship between two or
more variables to determine whether they are related and the strength and direction of the
relationship. For example, in the pizza topping survey, you could use correlation analysis to
examine the relationship between age and pizza topping preference.

Regression analysis
Regression analysis is used to examine the relationship between a dependent variable and one or
more independent variables to determine how much of the variation in the dependent variable
can be explained by the independent variables. For example, in the pizza topping survey, you
could use regression analysis to examine the relationship between age and pizza topping
frequency.

Factor analysis
Factor analysis is used to identify the underlying factors that are responsible for patterns in the
data. For example, in the pizza topping survey, you could use factor analysis to identify any
underlying factors or subgroups of respondents who have similar pizza topping preferences.

Cluster analysis

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Cluster analysis is used to group observations or respondents based on their similarities or
differences. For example, in the pizza topping survey, you could use cluster analysis to group
respondents based on their pizza topping preferences to identify any patterns or relationships
among different toppings.
Factor analysis reduces the number of variables by grouping them into a smaller set of factors.
Cluster analysis reduces the number of observations by grouping them into a smaller set of
clusters.
Classification analysis
• Classification analysis can be used to predict the probability of an outcome based on a set
of input variables. For example, in a healthcare context, classification analysis could be
used to predict the likelihood of a patient developing a certain disease based on their
medical history, lifestyle, and other factors.
Optimization
Optimization is a technique used to find the best solution or set of decisions that maximize or
minimize a particular objective or outcome. For example, in a manufacturing context,
optimization could be used to minimize the cost of production while maximizing the quality of
the products.

Simulation
Simulation is a technique used to model the behavior of a system or process over time, under
different scenarios or conditions. For example, in a supply chain context, simulation could be
used to model the impact of changes in demand or supply on the delivery time of products.
~The key difference between modeling and simulation is that optimization modeling provides a
definite recommendation for action in a specific situation, while simulation allows users to
determine how a system responds to different inputs so as to better understand how it operates.

Scale Reliability
• Scale reliability is the extent to which a scale can reproduce the same or similar
measurement results in repeated trials – measures consistency.
• The test-retest technique involves repeating the scale measurement with either the same
sample at two different times or two different samples of respondents under nearly the
same conditions.
• In the equivalent form technique, researchers create two equivalent scale measurements
and administer both forms to either the same sample of respondents or two samples of
respondents.
Scale Reliability

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 • Internal consistency is the degree to which the individual questions of a construct are
correlated.
Two popular techniques used to assess internal consistency.
• Split-half test.
Scale questions are divided into two halves and scores for each half are correlated against one
another.
High correlations indicate good internal consistency.
• Coefficient alpha.
Calculates the average of all possible split-half measures that result from different ways of
dividing the scale questions.
A value of less than 0.7 (exploratory) and 0.9 (confirmatory) shows low reliability.
Scale Validity
• Scale validity assesses whether a scale measures what it is supposed to measure – a
measure of accuracy.
• With face validity, researchers use expert judgment.
• While content validity:
Measures the extent a construct represents all the relevant dimensions.
Requires rigorous statistical assessment.
Is assessed before data is collected
• Convergent validity
• To measure the convergent validity of your test, you must demonstrate that there
is a positive correlation between measures of related constructs.
• Discriminant validity is the extent a single construct differs from others and is
unique.
• You can measure the discriminant validity of your test by demonstrating that there
is no correlation or very low correlation between measures of unrelated
constructs.
Factor Analysis
• Factor analysis is a technique that is used to reduce a large number of variables into
fewer numbers of factors.
• Stata Code: factor
• Principal component analysis: This is the most common method used by researchers.
PCA starts extracting the maximum variance and puts them into the first factor. After

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 that, it removes that variance explained by the first factors and then starts extracting
maximum variance for the second factor. This process goes to the last factor.
• Three Steps: (1) Explore, (2) Confirm, (3) Create
• Explore whether the given items are loading on a factor (Convergent Validity)
• Confirm whether the variable is unique (Discriminant Validity)
• Create the construct