in this context, they are the same. the thing we're talking about is the
true coeff on the excluded variable if indeed it were included.
Gary
On Sun, 11 May 2003, Stanislav Markus wrote:
on rule #3:
in other words, it's not enough for a variable, in order to be included
in the model to avoid bias, to be CORRELATED with the dependent variable
even after controlling for variables already included - it must AFFECT
the dependent variable?
the two seem not the same. e.g. in our model (regime~oil), islam is
correlated with regime (and w/ oil) even after controlling for other
vars, but it probably doesn't "affect" regime causally, or there's
at
least no cohesive theory that it does. should it be included? if yes,
then "affect" is only meant as correlation, right?
omitted variable bias occurs UNLESS one of those three are not true.
also change #3 to "it affects the dependent variable even fater
controlling for the other variables already in the regression"
Gary
On Sun, 11 May 2003, Olivia Lau wrote:
Hi, guys.
I know we went over this in Gov 1000, but I can't find my notes.
Someone please correct me where I'm going wrong.
Omitted variable bias occurs when one of the following
conditions holds:
1) It's correlated with your quantity of interest.
2) It's causally prior to your quantity of interest.
3) It's correlated with the dependent variable. (?)
I'm not sure on (3). Can someone please help?
Thanks,
Olivia.
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