Let KidEduc denote the education of a kid, and let MomEduc denote the education of the kid's mother. A simple model relating kid's education to mother's education is KidEduc = 1 + 2MomEduc+ u, where u is the disturbance term.

1. [9 points] What could be contained in u? Please list three examples and explain.

2. [9 points] Choose one of the three examples you list in 1 that is likely to be correlated with MomEduc. Discuss how that correlation a ect the unbiasedness of 2. If there is a bias, discuss whether the bias is likely to be positive or negative.