Suppose high school grades are a function of the poverty rate in the area in which the school is located and per-student expenditures at the school.

Graduate = α₁ + α₂povrate + α₃expend + u_t

But you naively estimate the following instead:

Graduate = α₁ + α₂povrate + u_t

What is a type of bias that you are committing? What is the direction of that bias?

Answer rating: 100% (QA)

In this case the researcher intends to estimate or analyze the relationship between the high school ... View the full answer