If the omitted variable is negatively correlatedwith the treatment (x1,x2)<0 and has apositive impact on the outcome(b2>0), thenthe effect of b1 is overestimated orunderestimated?

Introduction: Consider a multiple regression model with response variable, y, and two explanatory…

Answered: If the omitted variable is negatively…

Calculus For The Life Sciences

2nd Edition

ISBN:9780321964038

Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.

Chapter1: Functions

Section1.2: The Least Square Line

Problem 5E

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If the omitted variable is negatively correlated with the treatment (x1,x2)<0 and has a positive impact on the outcome(b2>0), then the effect of b1 is overestimated or underestimated?