Quant #14: Inductive and Deductive Approaches to Research

There are two common approaches to research: the inductive and deductive approaches. In inductive research, the goal is to develop a theory based on observation. Typically, this approach is employed when there is little or no theory on the subject to be studied. The researcher starts by collecting data pertaining to their area of interest and then analyzing them. If the researcher detects any patterns in the data, they can start building a theory that could explain the observed patterns. Thus, inductive research proceeds from data to theory or from particular instances of data to more general theories to explain the observed patterns.

Another approach to research is deductive research. This approach is used when there is an existing theory, and the goal is to test the theory.  The common steps involved in deductive research are: Identifying a theory; developing a hypothesis based on the identified theory; collecting data; analyzing and testing the data; and making decisions about the hypothesis. Deductive research moves from general theories to particular instances or cases. This approach is what most people think of when they think of scientific research.