Consider the omission of more than one explanatory variable. Imagine that the population relationship is where i
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Consider the omission of more than one explanatory variable. Imagine that the population relationship is
where εi has all of the properties of chapter 5.
(a) What is E(yi)?
(b) We estimate
What is
(c) Without formal derivation, generalize the result of part
a. Imagine that the population relationship is
What do we think that the bias would be if we estimate byx1 with
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