An omitted variable bias satisfies the following properties The omitted variable also causes y independent of...
An omitted variable bias satisfies the following properties
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The omitted variable also causes y independent of the explanatory variable |
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The omitted variable is uncorrelated with the included explanatory variable |
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The omitted variable does not cause y independent of the explanatory variable |
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The omitted variable is correlated with the included explanatory variable |
Homework Answers
solution:
Given data:
Ommited variable bias occurs when a statistical model leaves out one on more explanatory variables from the model and as a result the estimators obtained will be biased.
The omitted variable variable is also uncorrelated with the included explanatory variable. Hence, 2nd Option is the correct choice.
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