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.

Question

Quizplus · Accepted Answer

Including another variable in the regression eliminates the possibility of omitted variable bias, which may affect the accuracy of the estimated coefficients.

By Including Another Variable in the Regression, You Will