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A researcher estimates a wage regression WAGE = 1 0 + 0 . 5 S where S = y ears of schooling. Seeking to improve
A researcher estimates a wage regression WAGE where ears of schooling. Seeking to improve the explanatory power of the regression, the researcher adds another independent variable called SHOESIZE, which happens to be unrelated to the wage. Adding this irrelevant variable will
will make the estimation of the coefficients bk more inefficient.
increase the Adjusted Rsquare.
decrease the standard errors of the estimated coefficients.
improve the interpretability of the model by reducing the error.
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