When researchers begin to think about a topic to study, they spend some time finding out what has already been studied in their area of interest. They search for articles and reports that provide information on the history, background, key findings, related issues, and knowledge gaps related to their research. Understanding what information is already out there on a topic helps the researchers focus their own study while placing it in the proper context of current and past research. This process is the literature review. The researchers are literally reviewing what has already been written on their topic. Usually, when they are publishing the results of their own study in a journal article, the researchers begin their paper with a short literature review which provides background and context for the readers, helping them to understand the relevance and importance of the current study.
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You may also want to look at PLoS One's Ten Simple Rules for Writing a Literature Review to get ideas to how to approach this assignment and things to think about as you work