The Hypothesis

A hypothesis is a statement about the predicted relationships among events or variables.
A good hypothesis in the present case might identify which specific variable has a causal
effect on the amount of insurance sold by agents. For example, the hypothesis might
predict that the agents’ level of training has a positive effect on the amount of insurance
sold. Or, it might predict that the agents’ level of motivation positively affects sales.
In developing the hypothesis, you can be influenced by any of a number of sources, such
as an existing theory, related research, or even personal experience. Let’s assume that you
are influenced by goal-setting theory. This theory states, among other things, that higher
levels of work performance are achieved when difficult work-related goals are set for
employees. Drawing on goal-setting theory, you now state the following hypothesis:
“The difficulty of the goals that agents set for themselves is positively related to the
amount of insurance they sell.” 

Notice how this statement satisfies the definition for a hypothesis: it is a statement about
the relationship between two variables. The first variable could be labeled Goal
Difficulty, and the second, Amount of Insurance Sold. Figure 1.1 illustrates this
relationship.

Hypothesized Relationship between Goal Difficulty and Amount  of Insurance Sold