Draft Summary of the Business Model Canvas

Hypothesis Statements – Overview and Template

This document contains definitions, examples, and a template to complete for your assignment.

Hypothesis Statements Overview

A hypothesis is a prediction about the relationship between two variables. Hypotheses statements often start as an educated guess about how one variable affects a second variable. A hypothesis statement must be testable (i.e., you can verify or falsify with observable evidence).

Most hypothesis are written in the form of an If/Then statements. Examples of If/Then statements are:

· If you drink coffee before going to bed, then it will take longer to fall asleep.

· If you get at least 8 hours of sleep, you will do better on tests than if you get less sleep.

· If you reduce your consumption of sugar, you will lose weight.

A good hypothesis contains the three elements listed below:

1. The dependent variable(s): Who or what you can vary or control.

2. The independent variable(s): Who or what you predict will affect the dependent variable.

3. What you predict the effect will be.

A good hypothesis statement is written as, IF (the Dependent Variable) THEN (Independent Variable) is affected in a specific way.

Assumptions Versus Hypothesis

There are general differences between an assumption and a hypothesis.

· Assumptions are vague, optimistic, and untestable. Vague = harder to prove or disprove.

· Hypotheses must be specific to be tested. You can design experiments to generate data that support or reject your hypothesis.

Here are some examples of assumptions vs. hypotheses:

Assumption	Hypothesis	Independent Variable (IV)	Dependent Variable (DV)
If you drink coffee before going to bed, then it will take longer to fall asleep.	Consumption of 500 mg of coffee within 1 hour of bedtime will delay time to fall asleep by over 30 minutes.	Caffeine consumption	Time to fall asleep
If you get at least 8 hours of sleep, you will do better on tests than if you get less sleep.	Students who sleep at least 8 hours of the night before will improve test scores by 10%.	Number of hours of sleep	Test score improvement
If you reduce your consumption of sugar, you will lose weight.	Patients who reduce sugar consumption to below 25 grams daily for 90 days will experience 2% weight loss.	Sugar consumption over the next 90 days	Weight loss

Hypothesis Best Practices

Review the examples provided below for tips on writing a strong hypothesis.

Symptom	Fix
Are there vague words like “some people” or “customer”?	Be specific. Create a well-defined persona defining the specific demographic group you are targeting.
Can it be measured specifically, or does it contain vague concepts that cannot be tested?	Create a measurable hypothesis. Eliminate hedging words like “maybe,” “better,” “some,” and convert to If/Then statement.
Is it actually risky?	If it is not truly risky, it is not relevant and does not need to be tested right now. (It may get riskier later and resurface.)
Has a second set of eyes looked at it?	Everyone has blind spots. Check your work with another entrepreneur and ask the person to tighten up the hypothesis to make sure it is specific, measurable, and realistic.

Part 1 – Write a Hypothesis Template

Instructions: Select one problem statement and create three versions of hypotheses statements for this problem. Document the problem statement above the chart and complete each row and column as directed in the assignment. Then, write a 250-word summary based on the prompt at the bottom of this document.

Problem statement: ___Global Inflation___________________________________________________________________

	Good Hypothesis	Better Version	Best Version	Independent Variable	Dependent Variable
	Example: The addition of fresh water wells within Rio de Janeiro will help.	Example: The addition of fresh water wells within Rio de Janeiro will increase citizens' health.	Example: The addition of seven fresh water wells in the town of Rozinho, (near Rio de Janeiro) will decrease doctor visits by 20%.	Example: Fresh water wells.	Example: Amount of doctor visits.
1.	The decrease in global inflation rates will help	The decrease in the global inflation rates will help lower the cost of cost of living	The decrease in global inflation rates by 2% will lower the cost of living by 15%	Inflation rate	The cost of living
2.	The policies of the Federal Reserve Bank will help	The policies of the Federal Reserve Bank will help to reduce inflation rates.	The increase in Federal Reserve Bank interest rates by 0.75% will reduce inflation rates by 2.7%	Interest rates	Inflation rates
3.	Selling of Federal Reserve Bank treasury bonds will help	Selling of Federal Reserve Bank Treasury bond will help reduce money supply	Selling 30% of the Federal Reserve Bank Treasury bonds will help reduce money supply 20%	Treasury bonds	Money supply.

Part 2 – Write a Summary of Your Hypothesis Statement

Write a 250-word description of your final hypothesis statement. Describe the independent and dependent variables, and describe how you would objectively define a measurable, testable, replaceable, and meaningful hypothesis. How is your hypothesis measurable? How will you test it?

Summary of my Hypothesis

The independent variables in my hypothesis statement are inflation rate, interest rates and treasury bonds. These variables impacts on the dependent variables which are cost of living, inflation and money supply. High inflation rates erodes the purchasing power of money, leads to increases in the prices of products and services and pushes the cost of living to the roofs. The impacts of inflation on the cost of living can be measured and tested objectively by comparing the price of range of products and services on which consumers spends money. In this regard my hypothesis can be tested by comparing the prices of products and services over time. The persistent increase in prices of products and services will mean high inflation which will translate to high cost of living. Besides, the impacts of interest rates in reducing inflation can be measured objectively and tested consumer price index For instance if the consumer price index is high it means that inflation is high thus the Federal Reserve Bank can increase the bank interest rates thus increasing the cost of borrowing and consequent decrease in money in circulation thus decrease in inflation. Another critical way that the Federal Reserve Bank can reduce inflation and secure the cost of living is by selling treasury bonds. When the Fed Reserve Bank sells treasury bonds through the open market operations it gets money from the public thus reducing the money supply thus leading in decrease in inflation. This hypothesis can be tested by measuring the consumer prices index to determine if the inflation has dropped.

© 2022. Grand Canyon University. All Rights Reserved.

5