Hypothesis Testing Paper

Hypothesis Testing Paper

In the Harvard Business Review article “Market Lunacy,” Lisa Burrell describes how researchers Ilia Dichev and Troy Janes asked the question whether the common belief that the moon changes moods and causes depression may actually be accurate or is it a myth. They believe that most studies have focused on extreme cases so they decided to focus on stock exchanges with the assumption that something that involves millions of people around the world participating in it every day should indicate any deviation from the norm. The researchers were looking at the hypothesis that depressed people affected by the moon will cause a drop in stock prices. Dichev and Janes looked to prove or disprove the theory of the moon affecting behavior, so they studied the daily median stock price profits of 25 stock exchanges over the last thirty years. In their findings, they learned that there is indeed a drop in stock price profits on the day of a full moon versus the day of a new moon.

The lesson to be learned in their research is that sometimes looking at a question