1. Deductive approach Definition
The process of moving from a general theory to specific hypotheses and observations of empirical phenomena

2. Inductive approach Definition
The process of moving from specific observations to more general claims
Start with specific case to generate hypothesis
Example
Explain economic development in one village in Shaanxi Province, China, in 2011

3. Hypothesis Definition
Specific statement that can tested against (additional) evidence.
The statement tells a story about the relationship between variables
Example:
Roads and household rights to land  “causes” more income for households
Road + land = higher income

4. Variable Definition Variable—
something that can hold different “scores”; it can vary
Example: economic development
Different scores
Higher (GDP per capita of US$ 5,000)
Lower (GDP per capital of US $1,000)

5. Theory
Definition
A theory is a general explanation covering a full set of empirical phenomena.
It is supported by extensive evidence (not just one example)
It is typically based on variables that represent more abstract, general concepts
Example:
The greater the state investment in infrastructure and the more widespread private property rights, the greater the economic development.

6. Positive v. normative theory
Definition
Positive: based on the empirical evidence
Normative: based on what is socially desirable