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Give an example of omitted variable bias in a multiple linear regression model. Explain how you...

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Basic Math

Give an example of omitted variable bias in a multiple linearregression model. Explain how you would figure out the probabledirection of the bias even without collecting data on this omittedvariable. [3 marks]

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Suppose you want to find out what factors determine the price of homes in your area What could you set up to monitor all the variables You decide to run a multiple regression to estimate the price of houses For this you thought of all the factors you want to include in your regression You included variables like number of rooms in the house    See Answer
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