By Including Another Variable in the Regression, You Will A Decrease

question 27

Short Answer

By including another variable in the regression, you will a. decrease the regression $R ^ { 2 }$ if that variable is important.
b. eliminate the possibility of omitted variable bias from excluding that variable.
c. look at the $t$ -statistic of the coefficient of that variable and include the variable only if the coefficient is statistically significant at the $1 \%$ level.
d. decrease the variance of the estimator of the coefficients of interest.

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Definitions:

Control Costs

Efforts and measures implemented to monitor and manage expenses to ensure they align with budgetary constraints and financial goals.

Cost Center Evaluation

The process of analyzing the performance and efficiency of a department or unit within an organization that does not directly generate revenue.

Controllable Margin

The amount of profit or contribution margin that a manager can directly influence by controlling costs and generating revenues.

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, indicating how much contributes to covering fixed costs and generating profit.