Scientists must conduct investigations as empirically as possible. There are some steps that the scientist follows to make his examinations a success. The first is the formulation of a hypothesis. The hypothesis is a statement that outlines specific predictions that the investigator makes about the outcome of the study. There are two possible outcomes to any investigation. Either the supposition to the study is correct or it is wrong. Accordingly there are two hypotheses. These are called the null hypothesis and the alternate hypothesis.

### Null Hypothesis

This hypothesis statement presupposes that there is no significant difference in the variables. There could be two or more variables in the study. For example, a null hypothesis could state that there is no significant difference in the buying patterns if the size of the product is altered. The analyst would first conduct the study with the existing size of the product and ascertain the number of customers. Then the analyst would conduct the study with the product of increased or decreased size.The null hypothesis is denoted by H0.

### Alternate Hypothesis

This hypothesis statement says that there exists a significant difference in the variables under examination. This is the converse of the null hypothesis. In the same example, the alternate hypothesis would say that the customers would be affected by the alteration of the size of the product. Either more customers would be tempted to make the purchase or the existing customers would stop buying the product if the size is changed. The alternate hypothesis is denoted by H1.

### Confidence Levels

The scientist needs to prudently determine the confidence limits or interval. The confidence limits define the range of the data to be tested. If the results lie within the range, the scientist accepts the null hypothesis of the study. If the results are greater than or lesser than the limits, the scientist rejects the null hypothesis and sticks to the alternate hypothesis. For example, the scientist may decide to allow a deviation of .02 in the study variables to accept the null hypothesis.

### Variables

There are at least two variables in the study. These are the independent and the dependent variables. Factors which have the ability to influence the outcome of a variable are called dependent variables. Variables that are not affected by any factors or considerations are called the independent variables. For example, the money in an individual's wallet is an independent variable. All the products that he can possibly buy are the dependent variables.