Assume that y is a function of three variables: X1, X2, and x3. If you run a regression of y on the first two variables x1 and x2 only, the coefficient on x1 will be unbiased as long as there is no correlation between x, and x3.

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section4.5: Correlation And Causation
Problem 24PFA
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Indicate whether the following statements are true, false, or uncertain, and provide a short (no more
than three sentences) justification of your response.
2.
Assume that y is a function of three variables: X1, X2, and x3. If you run a regression
of y on the first two variables x1 and x2 only, the coefficient on x1 will be unbiased as long
as there is no correlation between X1 and X3.
Transcribed Image Text:Indicate whether the following statements are true, false, or uncertain, and provide a short (no more than three sentences) justification of your response. 2. Assume that y is a function of three variables: X1, X2, and x3. If you run a regression of y on the first two variables x1 and x2 only, the coefficient on x1 will be unbiased as long as there is no correlation between X1 and X3.
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