Why Can't the Regression Coefficients in Correlation Analysis Be Interpreted

question 20

Multiple Choice

Why can't the regression coefficients in correlation analysis be interpreted as the causal effect of a treatment on the outcome?

• A) Co-movement/correlation amongst two variables could be generated by their relationship to other variables.
• B) Regression coefficients in correlation analysis cannot be consistent.
• C) Regression coefficients in correlation analysis cannot be unbiased.
• D) You cannot conduct hypothesis tests on coefficients in correlation analysis.

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Definitions:

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or age.

Annual Depreciation

The portion of the total cost of a tangible asset that is expensed each year over its useful life.

Asset's Life

The estimated duration over which an asset is expected to be useful in a business before it requires replacement.

Insufficient Capacity

A situation where a firm cannot meet the demand for its products or services due to limitations in its production or service capabilities.