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Hypothesis Testing

Definition & Meaning

A hypothesis is a tentative generalization, the
validity of which remains to be tested. In this
most elementary stage, the hypothesis may
be very hunch, guess, imaginative data, which
becomes the basis for action or investigation.
George A Luniberg
Hypothesis helps us see and appreciate:
The kind of data that need to be collected in
order to answer the research questions
The way in which they can be organised most
efficiently and meaningfully.

Role of Hypothesis
Gives definite point for investigation.
Specifies the sources of data that is required to
Determines the data needs. It defines which facts are
relevant and which are not,
Prevents a blind search and collection of unessential
data usually proving irrelevant to the problem.
Suggests what type of research is likely to be most
Determines the most appropriate technique of
Contributes to the development of theory. It links
theory and investigation,

Sources of Hypothesis
Observation in day to day practices.
Suggestions from functional executives.
Suggestions form the shop floor.
Scientific theory
Analogies (similarity between two
Experiences of the competitors.
Findings of Research and Development

Kinds of Hypothesis
Hypothesis that explain the existence of
empirical uniformities.
Hypothesis that deal with the complex
existence of logically derived relationships
between empirical uniformities.
Hypothesis which are concerned with the
relation of analytic variables.

Explanatory or Descriptive Hypothesis
Tentative Hypothesis
Representative Hypothesis

Characteristics of Hypothesis
Conceptually clear
Have empirical referents.
Related to available techniques
Related to the body of the theory.
Relevant to the existing environmental
conditions for the purpose of testing.
Identify the specific variables and their

Importance of Hypothesis

Helpful in enquiry.
Selection of relevant factors.
Helps drawing conclusions.

Difficulties in Formulating Hypothesis

Lack of knowledge of scientific methods.
Lack of clear theoretical background.
Lack of logical background.

Means to Overcome Difficulties

Complete and Perfect knowledge of the
principles of the concerned subjects has to be
Hypothesis should be brief and timely from the
very beginning.
Hypothesis may grow as the research proceeds
further, which means that hypothesis should
become elaborate as it proceeds in the field.

Testing of Hypothesis
Two important means of testing hypothesis:
To test the hypothesis for logical consistency
To test the hypothesis for agreement with fact

Testing of hypothesis include two types of

Type I error: Rejecting Hypothesis if it is true
Type II error: Accepting Hypothesis, when it is

Steps in Testing Hypothesis

Collecting the data

Formulation of Hypothesis
Deduction from the hypothesis
Verification of the separate deductions

2 types of verification:
Positive or to confirm
Negative or to refuse

Statistical Hypothesis / Tests of

Prepare a hypothesis
Null Hypothesis (H0)
Alternative hypothesis (H1)

Choose a suitable significance level

Decided test criterion
Carry calculations

Types of Errors in testing hypothesis

Limitations of Tests of Significance

Test of significance should not be used
Conclusions are to be given in terms of
probabilities and not certainties.
Test do not tell us why the difference exists.