Question: f2. Use the data in the file ovb.xlax. These data were generated so that y, = 1x1 + 2x2 + 8{ or that #1 =

\f2. Use the data in the file ovb.xlax. These data were generated so that y, = 1x1 + 2x2 + 8{ or that #1 = 1 and B1 = 2. a. Regress y on X1, X2. Are the coefficient estimates significantly different from 1.0, 2.07 b. Are Xi, X2 significantly correlated? c. Regress x, on x2 and save the residuals. Then regress y, on just the residual of x, from the first stage. How do the estimates compare to part a above? d. Now suppose you do not observe x2. Regress y on just x1. Are the coefficient estimates significantly different from 1.0? Are they different from part a above? e. Using the results from c and d, decompose the OVB between the effects of x2 on Xi on y

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