Answered: Consider a regression in which a…

Consider a regression in which a coefficient suffers from downward omitted variable bias. If you add a regressor that controls for the omitted variable bias: Group of answer choices

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 1.3CE

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Question

Consider a regression in which a coefficient suffers from downward omitted variable bias. If you add a regressor that controls for the omitted variable bias:

Group of answer choices

1. Can’t determine

2. The new estimate will be smaller.

3. The new estimate will remain unchanged.

4. The new estimate will be larger

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