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:

Actor-Observer Effect

A bias in attribution where individuals attribute their own behaviors to situational factors but others' behaviors to personal characteristics.

Actor-Observer Asymmetries

The tendency for individuals to attribute their own actions to situational factors while attributing others' actions to intrinsic characteristics.

Interpersonal Relationships

Emotional or social connections between two or more people that may vary in duration and significance.

Covariation Principle

The tendency to see a causal relationship between an event and an outcome when they happen at the same time.