Question

Suppose you are interested in understanding the causal impact of having an MBA (versus just an undergraduate degree in business) on earnings. To this end, you estimate a regression of the following form:

EARNINGS = 55679 + 27809(MBA)

1. Write out the causal question/relationship that is implied by the above equation.

2. The estimated coefficient above suggests that individuals with an MBA earn $27,809 more than those with just a business undergraduate, on average. Give an example of how omitted variable bias might impact this estimate.

When omitted variable bias is thought to be an issue, researchers often recommend the use of randomized control trials (RCTs), which are often used in medical research (e.g., to evaluate the effectiveness of a new drug). While such studies are rare in social sciences, suppose you are able to randomly assign individuals to either an MBA or just an undergraduate business degree. Using the omitted variables bias equation, please explain why we would expect to obtain an unbiased estimate of β₁, which in this case represents the relationship between getting an MBA and subsequent earnings.

Answer 1

Internal customers are people from within your organization or your partners to whom you provide your services in order to deliver the final product/service. Internal customers are your coworkers, like your Manager or your sales person who brings in the orders. External customers are people who are buying your final product/service. External customers are your clients who buy from you and are the source of revenue. Most companies only consider external customers as their customers since they are the ones who feedback.But a dissatisfied external customers could be because of your internal customer service. This could be as a result of an unhappy coworker tranfering a bad service to the external customer. For external customer delight, you first need to make sure that your internal customers are satisfied. You satisfaction and delight in order to achive external customer delight