What is a theory?

A theory is an explanation, but not just any explanation. A theory asserts that wherever a set of circumstances occur, a predictable similar result will be seen. For example, suppose someone has a theory of speeding which says that whenever a car is driven over the speed limit, the probability of an accident greatly exceeds the probability of an accident for cars driven below the speed limit. In simple language, the theory says speeding drivers are more likely than regular drivers to be victims of road accidents. This is a proper theory, because it applies to any car anywhere there is a speed limit.

Secondly, a proper theory can be tested for its accuracy against the known facts (data). In this case, the facts would be the number of accidents recorded in a particular jurisdiction, the number of cars driving over the limit and also the number under the limit associated with recorded accidents. As a matter of fact, accidents will generally show an association with speeding or they will not. If they do, the theory is supported by the facts. If they do not, the theory is not supported; but it is still a theory just not a correct one.

  1. An explanation
  2. Can be tested against known facts (data)

A theory makes general statements, could either be of cause and effect or of association between two things, and a theory is testable against facts. A theory need not be right every single time, but it does need to be right often enough to be rely on most of the time. It differs from a law which needs be right all of the time, for example, the four laws of thermodynamics; else it is not a law but still a theory.

A law is always right. A theory is usually right

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Categories: Personal Development, Personal Finance

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