Spreadsheet.pdfSheet1Hypothesis-Testing Paper Instructions Due December 12, 2014 The purpose of this document is to explain how to complete the hypothesis-testing assignment. The assignment should give you a better feel for the way social-scientific research is done. Because many students are likely to be unfamiliar with this kind of research, it requires some explanation. Step 1. Pick something you find interesting. The first thing you'll need to do is to find something to explain. (The thing you will be explaining is sometimes referred to as the "dependent variable," because, in the context of your argument, it will "depend on" the explanatory variable you will examine.) Anything that you find interesting is a potential topic. This class covers many issues related to poverty, trade, foreign investment, military spending, infant mortality, and many other things that could be suitable topics. You might have a personal interest in other questions such as why some states win more medals at the Olympics, or why some states have more lawyers as a percentage of the population. The choice is yours, as long as it is reasonably related to the class. Consult your TA if you are not sure a particular topic is appropriate. As an example, I'll be using economic growth in poor states. The first paragraph of your paper should explain why you find your topic interesting. Here is an example. One of the most striking facts of life in the international system is the enormous economic inequality between states. People in the poorest states must survive on only a small fraction of what those living in wealthier states have. Poor states will have to grow very rapidly in order to make their way out of poverty and provide a better life for their people. Economic growth is important because it could offer a way out of extreme poverty. This paper will examine one possible source of economic growth. Step 2. Make an argument about your topic. The next thing you'll need to do is to think about what might explain the state-to-state differences in your "dependent variable." The things you think might influence your dependent variable are sometimes referred to as "explanatory variables" or "independent variables." This argument should end with a statement about the relationship you expect to find between your dependent variable and your explanatory variable. This statement is called a hypothesis. On many controversial issues, there may be more than one contradictory hypothesis. There is an example of this kind of contradiction below. In the November 13th lecture, I will present arguments about why democracy, indebtedness, foreign investment, and involvement in international trade might influence economic growth in poor states. I'll work through two examples drawn from this discussion here: one concerning the effect of democracy on economic growth, and one concerning the effect of foreign investment. You need only examine one relationship in your paper.After explaining why the phenomenon you want to explain is interesting, you should briefly present your argument about why one particular explanatory variable might influence your dependent variable. Note that in each of the two examples presented below, a hypothesis appears in bold print as the last sentence in each paragraph. Example 1. Democracy and Economic Growth One consideration that could influence economic growth in poor countries is the form of government they have. Democratic states that protect individual property rights should grow more rapidly than states in which these property rights are not protected. When people believe they will be able to keep the profits they earn from their labor or investment, they should be more willing to engage in the kinds of economic activities that contribute to economic growth. By contrast, when people believe that the results of their labor or investment will be taken from them without their consent by an authoritarian state, they will be less willing to engage in growth-producing activities. Democracies should grow more rapidly than other types of states. Example 2. Foreign Direct Investment and Economic Growth One possible barrier to economic growth in poor countries is the lack of capital. In order for economic growth to take place, entrepreneurs must be able to obtain enough capital to start or expand businesses. Foreign direct investment might be one way to overcome this problem. Multinational corporations who engage in foreign direct investment have access not only to capital, but also to technology, marketing, and other important resources that could help the states in which they invest to grow more rapidly. These considerations lead me to expect that states with more foreign direct investment should usually have higher rates of economic growth. On the other hand, we have discussed some reasons foreign direct investment might not lead to economic growth. Foreign investors might crowd out locally owned businesses, use technology that is too capital-intensive to take advantage of local resources of land and labor, or displace people engaged in subsistence agriculture. It is possible that these problems could cancel out the potential benefits of foreign direct investment for economic growth. If these problems are very severe, they might even have lower rates of economic growth. This line of argument leads me to expect that states with more foreign direct investment should not grow more rapidly than other states. Step 3. Pick a set of states on which to collect data. The next thing you'll need to do is to pick a set of states on which to collect data. You should examine at least 30 states. For each of these states you will want to collect information on both your dependent and explanatory variables. You'll need to explain why you selected the states you did, and where you got your information about them. If you are not sure which states to select, consider taking a random sample from a list ofstates in the world, perhaps the members of the United Nations. (You can find such a list through the UN's web site at this address: http://www.un.org/members/list.shtml) There are currently 193 member states, so taking every fifth state on such a list would give you a sample of 38 states. Another strategy is to select states from a particular region of the world in which you are especially interested, or where your topic is especially important. The next part of your paper should explain what states you