A regression model with three independent variables was constructed to analyze certain data: y = β₀ + β₁X₁ + β₃X₃ + β₂X₂ + ε.But while estimating the coefficient,the following regression model was mistakenly used: y = α₀+ α₁x₁ + μ.From the second formula,which of the following can be deduced to be affecting the regression model? A)specification bias B)autocorrelation C)heteroscedasticity D)sampling error

Question

Quizplus · Accepted Answer

The second formula has a specification bias because it is using a different set of variables than the original formula. The variables used in the second formula are not the same as the variables used in the original formula. This can lead to biased estimates of the coefficients and incorrect conclusions about the relationships between the variables. Autocorrelation, heteroscedasticity, and sampling error are not applicable in this scenario.

A Regression Model with Three Independent Variables Was Constructed to Analyze