Which of the following is expected to occur in multiple regression analysis if an important variable is omitted from the list of independent variables?
A)It will lead to unbiased least squares estimators.
B)It will lead to biased least squares estimators.
C)It will lead to biased estimators of the variance.
D)It will lead to multicollinearity between predictor variables.

Question

Quizplus · Accepted Answer

When an important variable is omitted from the list of independent variables, it can cause biased least squares estimators. This is because the estimated coefficients of the remaining variables may partially reflect the influence of the omitted variable, leading to incorrect conclusions about the true relationships between the independent and dependent variables.

Which of the Following Is Expected to Occur in Multiple