If you had a two-regressor regression model, then omitting one variable that is relevant:

A. makes the sum of the product between the included variable and the residuals different from 0.

B. will have no effect on the coefficient of the included variable if the correlation between the excluded and the included variable is negative.

C. will always bias the coefficient of the included variable upward.

D. can result in a negative value for the coefficient of the included variable, even though the coefficient will have a significant positive effect on Y if the omitted variable were included

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Business

Zavala

4 November, 20:34

If you had a two-regressor regression model, then omitting one variable that is relevant:

A. makes the sum of the product between the included variable and the residuals different from 0.

B. will have no effect on the coefficient of the included variable if the correlation between the excluded and the included variable is negative.

C. will always bias the coefficient of the included variable upward.

D. can result in a negative value for the coefficient of the included variable, even though the coefficient will have a significant positive effect on Y if the omitted variable were included

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Kieran Gillespie · Answer 1

D. can result in a negative value for the coefficient of the included variable, even though the coefficient will have a significant positive effect on Y if the omitted variable were included