Suppose that to explain the marginal effect of X on Y, the true model is Y=B₁ + B₂X + u. The OLS estimator for B₂ based

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Suppose That To Explain The Marginal Effect Of X On Y The True Model Is Y B B X U The Ols Estimator For B Based 1 (25.51 KiB) Viewed 12 times

Suppose that to explain the marginal effect of X on Y, the true model is Y=B₁ + B₂X + u. The OLS estimator for B₂ based on this true model is 3₂. Now, suppose a researcher included another variable Z in the regression: Y B₁ + B₂X + B₂2+u and obtained the OLS estimator 3₂ and 3₁. We also know that X and Z are correlated. Please select the correct statement(s). A, is a biased estimator for B₂ in the true model, and the direction of the bias depends on whether X is positively correlated or negatively correlated with 2 A is an unbiased estimator for B, in the true model The variance of 3 is greater than the variance of 3₂. The variance of a, is less than the variance of 3₂. Whether the variance of 3, is greater or less than the variance of 3, depends on whether X is positively correlated or negatively correlated with Z