The omitted-variable problem in statistical analysis occurs when
A)excluded variables are correlated with explanatory variables that are included in the analysis.
B)the demand for the product has not been stable over time.
C)the price of the product has been relatively unstable over time.
D)there is no uniform result because the accounted variables are not affected by changes in other variables.

Question

Quizplus · Accepted Answer

The omitted-variable problem occurs when there are other variables that are not included in the analysis but are correlated with the explanatory variables that are included. This can bias the estimated effects of the included explanatory variables and lead to incorrect conclusions.

The Omitted-Variable Problem in Statistical Analysis Occurs When