Research Methodology

Hypothesis Formulation & Testing

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 Hypothesis Testing
• Types of Research-Basic/Fundamental, Applied
• Review of Research
• Identifying the Research problem
• Formulation of Research problem
• Research Methods & Data Analysis
- Descriptive Statistics
- Inferential Statistics
- Causation models
- Forecasting Models
etc.

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 Hypothesis Formulation & Testing
Population
• Information can be collected by examining every
person/item from the totality related to the problem
(population), this is complete enumeration, or census.
Sampling
• Sometimes it is not possible and practical (cost-value
analysis) to examine/measure every person/item in the
population. So, information is collected from a part of the
population, known as sample. The process is sampling.
Types of sampling
• Random sampling or probabilistic sampling.
• Non random sampling
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 Hypothesis Formulation & Testing
• Random Sampling/probabilistic
Simple Random
Sampling

Systematic
Sampling
Random
Sampling
Stratified
Sampling

Cluster Sampling

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 Hypothesis Formulation & Testing
• Non-Random sampling

Convenience Sampling

Judgment Sampling

Non-Random Sampling Quota Sampling

Shopping Mall Intercept

Sampling

Snowball Sampling

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- Univariate (Z-test, t-test )
- Bivariate (Chi-square)
- Multivariate (ANOVA)

Hypothesis
• A research hypothesis is a statement of expectation or
prediction that will be tested by research. (predicting a
relationship between variables)
(Ex: Consumer Price Index and Oil prices)
• An unproven proposition or supposition that tentatively
explains certain facts or phenomena (Ex.IQ levels)
– Null hypothesis
– Alternative hypothesis
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Null Hypothesis
• Statement about the status quo i.e., No difference
Alternative Hypothesis
• Statement that indicates the opposite of the null
hypothesis
Significance Level
• Critical probability in choosing between the null
hypothesis and the alternative hypothesis
• Alpha
• Probability Level selected is typically .05 or .01
• Too low to warrant support for the null hypothesis
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 A Sampling Distribution

m=105 x
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 A Sampling Distribution

a=.025 a=.025

m=105
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x
 A Sampling Distribution

LOWER UPPER
LIMIT LIMIT

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m=105
Confidence Interval
• The probability that we associate with an interval estimate is
called the confidence level. The confidence interval is the range
of the estimate we are making. Confidence limits are the upper
and lower limits of the confidence interval.
• A high confidence level seems to signify a high degree of
accuracy in the estimate but high confidence levels will produce
large confidence intervals, and such large intervals are not
precise; they give very fuzzy estimates.
• 95% confidence interval means: “That if we select many random
samples of the same size and calculate a confidence interval for
each of these samples, then in about 95 percent of these cases,
the population parameter will lie within that interval.”

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• Interval estimate for mean of large sample (Population s.d. is
known):
X + Z. σ/√n : Upper confidence limit
X – Z. σ/√n : Lower confidence limit
• The t-distribution is symmetrical but flatter than the normal
distribution, and there is a different t-distribution for different
sample sizes (or degrees of freedom). As the sample size gets
larger, the shape of the t-distribution becomes approximately
equal to the normal distribution.
• Interval estimate for mean using t-distribution:
X + t. s/√n : Upper confidence limit
X – t. s/√n : Lower confidence limit
(value of t depends upon degree of freedom and α)
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•Example-1: Generally Electric has developed a new
bulb whose design specifications call for a light output
of 960 lumens compared to an earlier model that
produced only 750 lumens. The company’s data indicate
that the standard deviation of light output for this type of
bulb is 18.4 lumens. From a sample of 20 new bulbs, the
testing committee found an average light output of 954
lumens per bulb. At a 0.05 significance level, can
Generally Electric conclude that its new bulb is
producing the specified 960 lumen output?

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Example-2: MacroSwift estimated last year that 35
percent of potential software buyers were planning to
wait to purchase the new operating system, Window
Panes, until an upgrade had been released. After an
advertising campaign to reassure the public, MacroSwift
surveyed 3,000 people and found 950 who were still
skeptical. At the 5 percent significance level, can the
company conclude the proportion of skeptical people has
decreased?

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