By Including Another Variable in the Regression,you Will

question 27

Multiple Choice

By including another variable in the regression,you will

• A)decrease the regression R2 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:

Statistical Outcome

The result of any single observation or measurement regarding a statistical experiment.

Validity

The extent to which a concept, conclusion or measurement is well-founded and likely corresponds accurately to the real world.

Ordinal Data

Data that can be categorized and ranked in a specific order, but the intervals between the ranks are not necessarily equal.

Interval Data

A type of numerical data in which the intervals between numbers on the scale are interpretable and equal, allowing for meaningful comparison and arithmetic operations.