Hello,
I am writing a bachelor's thesis paper on the relationship between Economic Growth and Income Inequality (More specifically, how income inequality affects economic growth). My paper's main goal is to test this relationship but I also added other control variables to see how they affect growth. I am struggling a bit on formulating my research hypothesis. This is my hypothesis so far:
H1: The Income Inequality Indicator displays a negative relationship with GDP per capita.
H2: The Income Inequality Indicator displays a positive relationship with GDP per capita.
The thing is that I when I got feedback, it was mentioned that my hypothesis should be done in a better and more specific way. I would be glad to hear some suggestions
The best way to write a strong hypothesis is to propose a relationship between 2 variables: A single dependent variable and a single independent variable , in a clear focused language.
You should have a null hypothesis (Ho) and an alternative one (No Ho, H1). In your case, H1 is not equal to H0. H0 should be set according to Economic Theory. If both situations are possible (I think it can be your case) do not use Ho/H1 terminology; just explain that the sign of the coefficient is not clear ex ante.
Be clear regarding if you mean correlation or causatin.
Be clear regarding which variable is the dependent variable and which variable is the independent one.
I hope it helps,
A simple way to make your question more specific would be to specify which data you are looking at. For example, add: across US States 1950-2010, or across Italian provinces in 2015, or across German cities in 1850, etc...
Note: do not assume an effect (which supposes some causality) if you find a correlation.
In order to form a hypothesis, you must follow the following steps:
Collect as many notes as possible about a topic or problem.
Evaluate these notes and look for possible causes of the problem.
Create a list of possible explanations you might want to explore.
After developing some potential hypotheses, think of ways you can confirm or disprove each hypothesis through experience.
The income per capita gives you an average of total income divided by the total population. This variable itself may display large income disparities. You may relate the gross income with total population growth.
Hi, in addition to the excellent advice given earlier, I can add that mathematical methods of analysis never explain anything in economics. Mathematical methods are a means of "ordering" logical hypotheses. It is always necessary to distinguish between correlation, probabilistic analysis and direct relationship when analyzing the mutual influence of the analyzed variables. (You can read about this, for example, Daniel Kahneman “Thinking, Fast and Slow.”) The reasons for the concentration of wealth can be different. Based on my own research (I apologize for advertising my work, but the link here seems appropriate to me), I can assume. If the concentration of wealth is caused by the creation of new knowledge in society (for example, the rise in the value of Google), this contributes to an increase in the income of individuals in society. If concentration is associated with monopoly rent (new knowledge is not created in this case), then it will produce the opposite effect. In fact, the dependencies are probably more complex and changing over time (as society develops).
Good luck with your own hypothesis.
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