Types of Hypotheses

Topics: Null hypothesis, Statistical hypothesis testing, Type I and type II errors Pages: 2 (549 words) Published: June 18, 2013

There are three types of hypotheses which will be explored here:

Research Hypotheses
Research hypotheses are most nearly like hypotheses defined earlier. A research hypothesis is a statement of what the researcher believes will be the outcome of an experiment or a study. Before studies are undertaken, business researchers often have some idea or theory based on experience or previous work as to how the study will turn out. These ideas, theories, or notions established before an experiment or study is conducted are research hypotheses. Some examples of research hypotheses in business might include:

1.Older workers are more loyal to a company.
2.Companies with more than $1 billion in assets spend a higher percentage of their annual budget on advertising than do companies with less than $1 billion in assets. 3.The implementation of a Six Sigma quality approach in manufacturing will result in greater productivity. 4.The price of scrap metal is a good indicator of the industrial production index six months later. 5.Airline company stock prices are positively correlated with the volume of OPEC oil production.

Virtually all inquisitive, thinking business people have similar research hypotheses concerning relationships, approaches, and techniques in business. Such hypotheses can lead decision makers to new and better ways to accomplish business goals. However, to formally test research hypotheses, it is generally best to state them as statistical hypotheses.

Statistical Hypotheses
In order to scientifically test research hypotheses, a more formal hypothesis structure needs to be set up using statistical hypotheses. All statistical hypotheses consist of two parts, a null hypothesis and an alternative hypothesis. These two parts are constructed to contain all possible outcomes of the experiment or study. Generally, the null hypothesis states that the “null” condition exists; that is, there is nothing new happening, the old...
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