問題詳情

Question III (20 points, 10 points each)

 Consider the case where the true population model has two explanatory variables and an error term:


 and we assume that this model satisfies Gauss-Markov assumptions.


【題組】

4. Suppose that our primary interest is inβ1,, the partial eflect of x1 on y. We thus estimate the equationexcluding x2:

Note that the variable x2 may or may not be correlated with x1 . What is the effect, if any, of excludingx2 from the model on the estimatedβ1Explain.

參考答案