1. This first part of the homework will use one of the datasets used in the last homework set. With this assignment, you will find an Excel file called HW3.Vacation.xlsx. For reference, the variables in this file include: a. miles miles traveled per year income annual income ($ thousands) age = average age of adult members of household kids = number of children in household Run the following regression: Miles = Bo + B * age b. Hypothesize the sign of the bias, if any, resulting from excluding income from the regression. Explain your reasoning. C. Use Excel to verify (or not) your claim from b). Explain using your Excel ouptut to prove this. d. Break down the bias into the componet pieces (as we did in class) using the actual numbers. [Hint: you should be running the "shadow regression" to determine the value of a]. Highlight any values you are using from Excel to show this. 2008 Louis