A researcher plans to study the causal effect of police on crime using data from a random sample of U.K. counties. He plans to regress the county’s crime rate on the (per capita) size of the county’s police force. Explain why this regression is likely to suffer from omitted variable bias. Which variable would you add to the regression to control for important omitted variable? Determine whether the regression will likely over or underestimate the effect of police on the crime rate?

MATLAB: An Introduction with Applications
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Author:Amos Gilat
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Chapter1: Starting With Matlab
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A researcher plans to study the causal effect of police on crime using data from a random sample of U.K. counties. He plans to regress the county’s crime rate on the (per capita) size of the county’s police force. Explain why this regression is likely to suffer from omitted variable bias. Which variable would you add to the regression to control
for important omitted variable? Determine whether the regression will likely over or underestimate the effect of police on the crime rate?

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