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You run a regression of Y on X. Y is the outcome, X is the righthand side variable. (There are no other righthand side variables.) You estimate a coefficient of 3. You realize there is an "omitted variable" (call it "OV") that is POSITIVELY related to X (OV goes up, X goes up) and NEGATIVELY related to Which of the following is true?

You run a regression of Y on X. Y is the outcome, X is the righthand side variable. (There are no other righthand side variables.) You estimate a coefficient of 3. You realize there is an "omitted variable" (call it "OV") that is POSITIVELY related to X (OV goes up, X goes up) and NEGATIVELY related to Which of the following is true?

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Question 1 You run a regression of Y on X. Y is the outcome, X is the righthand side variable. (There are no other righthand side variables.) You estimate a coefficient of 3. You realize there is an "omitted variable" (call it "OV") that is POSITIVELY related to X (OV goes up, X goes up) and NEGATIVELY related to Y Which of the following is true? O The coefficient estimate for X is unbiased. O The coefficient estimate for X is UPWARDLY biased due to the Omitted Variable. O The coefficient estimate for X is DOWNWARDLY biased due to the Omitted Variable.
Transcribed Image Text:Question 1 You run a regression of Y on X. Y is the outcome, X is the righthand side variable. (There are no other righthand side variables.) You estimate a coefficient of 3. You realize there is an "omitted variable" (call it "OV") that is POSITIVELY related to X (OV goes up, X goes up) and NEGATIVELY related to Y Which of the following is true? O The coefficient estimate for X is unbiased. O The coefficient estimate for X is UPWARDLY biased due to the Omitted Variable. O The coefficient estimate for X is DOWNWARDLY biased due to the Omitted Variable.
Question 2 Following from the previous question, and based on your previous answer, which of the following is true? o Based on the bias and our estimate, the "true" coefficient (slope b/w X and Y is some number less than 3. (Including the possibility that it is negative.) O Based on our estimate, the "true" coefficient is the same as the estimated coefficient and is 3. O Based on the bias and our estimate, the "true" coefficient (slope b/w X and Y) is some number greater than 3.
Transcribed Image Text:Question 2 Following from the previous question, and based on your previous answer, which of the following is true? o Based on the bias and our estimate, the "true" coefficient (slope b/w X and Y is some number less than 3. (Including the possibility that it is negative.) O Based on our estimate, the "true" coefficient is the same as the estimated coefficient and is 3. O Based on the bias and our estimate, the "true" coefficient (slope b/w X and Y) is some number greater than 3.
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