King, Keohane and Verba (1994) discuss the use of multiple regression to estimate causal effects in the
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King, Keohane and Verba (1994) discuss the use of multiple regression to estimate causal effects in the social sciences. According to them,
“Random error in an explanatory variable produces bias in the estimate of the relationship between the explanatory and the dependent variable. That bias takes a particular form: it results in the estimation of a weaker causal relationship than is the case.” [p. 158]
Do you agree or disagree? Discuss briefly. (The authors have in mind a model where Y = Xβ + $, but the investigator observes X∗ = X + δ
rather than X, and regresses Y on X∗.)
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