Hello,
I am writing a thesis paper on the relationship between economic growth and income inequality. For income inequality I am using 2 indicators, the GINI and some key income inequality indicators from the world inequality database (these indicators are based on 3 different income groups).
My question is how can I make my research hypothesis as specific as possible? Should I do 4 hypotheses? For instance, a null and alternative hypothesis for GINI's effect on GDP per capita and then again the same for the key indicator's effect on GDP per capita?
I would formulate the null and the alternative hypotheses without specifing the specific measure.
Ho: inequality has no effect on growth
Ha: inequality has an effect on growth
Actually, it makes some sense formulating Ha like that, because the effect of inequality could be positive or negative depending on the underlying theoretical framework.
It depends on how you want to write the paper. You could just have a general hypothesis and test with both indicators. Or you could have separate hypotheses relating to both indicators.
I think I would just go with the former.
Mark Tomlinson Yes, you could do that to test the effects of the indicators (Gini and key income inequality indicators) separately and then proceed to test the general hypothesis regarding the relationship between economic growth and income inequality using WALD coefficients test. Here, you set the effects of the two proxies of income inequality to zero (i.e C(1) = C(2) = 0) and use the WALD test statistic to evaluate.
Thank you.
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