9. Suppose you are interested in the effect of class attendance on college perfo

Question

9. Suppose you are interested in the effect of class attendance on college performance, and plan to estimate the following model: artGPA = + skipped + u, where qrtlGPA is quarter GPA and skipped is the percentage of classes skipped per quarter. Due to lac regression. Assume that more motivated students are less likely skip classes. O estimator of the coefficient for skipped will most likely k of information, students' motivation is omitted from the a) be unbiased, but less effiicent. be overestimate an cj be biased, and the impact of skipped on qrtGPA will be underestimated. d) be biased, but the bias can go either direction.

Explanation / Answer

Here the problem is explained in detail.

Let say the true relationship is

qrtGPA = a + b * skipped + (c * motivation +   u')

where (c * motivation +   u') = u that is hidden here.

so, it is given that more motivated student are less likely to skip classes so that would also a have a true relationship

motivation = d - e* skipped + u''

where relationship coefficient is negative in nature

so by putting it in the equation.

qrtGPA = a + b * skipped + [c * (d - e* skipped + u'') +   u')]

so the coefficient is = b - ce for the skipped term

that is equal to b - ce =

so that shows an underestimation as the real coefficient is b and what is in the equation is .

So, option C is correct. It is biased, and the impace of skipped on qrtGPA will be underestimated.

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