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lara [203]
3 years ago
5

Consider the multiple regression model with two regressors X1 and X2, where both variables are determinants of the dependent var

iable Y. You first regress Y on X1 and find no relationship. However, while regressing Y on X1 and X2 the slope coefficient of the variable X1 changes by a large amount. This suggests that your first regression suffers from:
A. Perfect multicollinearity
B. Dummy variable trap
C. Omitted variable bias
D. Heteroskedasticity
Mathematics
1 answer:
charle [14.2K]3 years ago
4 0

Answer:

<em>C. Omitted variable bias </em>

Step-by-step explanation:

In mathematics and statistics, omitted-variable bias (OVB) happens if one or more important variables is left out by a statistical model.

The bias results in the equation being related to the expected effects of the included variables by the influence of the excluded variables.

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Answer:   c > 12

Step-by-step explanation:tep  1  :

           c

Simplify   —

           3

Equation at the end of step  1  :

       c            

 ((2 • —) -  1) -  7  > 0  

       3            

Step  2  :

Rewriting the whole as an Equivalent Fraction :

2.1   Subtracting a whole from a fraction

Rewrite the whole as a fraction using  3  as the denominator :

        1     1 • 3

   1 =  —  =  —————

        1       3  

Equivalent fraction : The fraction thus generated looks different but has the same value as the whole

Common denominator : The equivalent fraction and the other fraction involved in the calculation share the same denominator

Adding fractions that have a common denominator :

2.2       Adding up the two equivalent fractions

Add the two equivalent fractions which now have a common denominator

Combine the numerators together, put the sum or difference over the common denominator then reduce to lowest terms if possible:

2c - (3)     2c - 3

————————  =  ——————

   3           3    

Equation at the end of step  2  :

 (2c - 3)    

 ———————— -  7  > 0  

    3        

Step  3  :

Rewriting the whole as an Equivalent Fraction :

3.1   Subtracting a whole from a fraction

Rewrite the whole as a fraction using  3  as the denominator :

        7     7 • 3

   7 =  —  =  —————

        1       3  

Adding fractions that have a common denominator :

3.2       Adding up the two equivalent fractions

(2c-3) - (7 • 3)     2c - 24

————————————————  =  ———————

       3                3    

Step  4  :

Pulling out like terms :

4.1     Pull out like factors :

  2c - 24  =   2 • (c - 12)  

Equation at the end of step  4  :

 2 • (c - 12)

 ————————————  > 0  

      3      

Step  5  :

5.1    Multiply both sides by  3  

5.2    Divide both sides by  2  

Solve Basic Inequality :

5.3      Add  12  to both sides

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Inequality Plot :

5.4      Inequality plot for

        0.667 X  - 8.000  >  0

 

 

One solution was found :

                  c > 12

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