Suppose that you are interested in estimating the average impact a job training program has on wages. However, you recognize that there are some observed factors that influence wage, participation on the training program, or both. You may still get the unbiased estimate for the program effectiveness by:
A)Excluding those observed factors from your model and running a simple linear regression
B)Including only the factors that predict wage but not participation as controls and running a multiple linear regression
C)Including only the factors that predict participation but not wage as controls and running a multiple linear regression
D) Including factors that predict both wage and participation as controls and running a multiple linear regression

Question

Suppose that you are interested in estimating the average impact a job training program has on wages. However, you recognize that there are some observed factors that influence wage, participation on the training program, or both. You may still get the unbiased estimate for the program effectiveness by:
A)Excluding those observed factors from your model and running a simple linear regression
B)Including only the factors that predict wage but not participation as controls and running a multiple linear regression
C)Including only the factors that predict participation but not wage as controls and running a multiple linear regression
D)​ Including factors that predict both wage and participation as controls and running a multiple linear regression
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Quizplus · Accepted Answer

To obtain an unbiased estimate of the program effectiveness, we need to control for factors that influence both wage and participation. Therefore, we should include factors that predict both wage and participation as controls in a multiple linear regression.

Suppose That You Are Interested in Estimating the Average Impact