11.8 Discussion

The Direction of Omitted Variable Bias

• For each regression, estimate whether omitted variable bias is towards zero or away from zero.

Regression Output	Omitted Variable
\(\widehat{grade} = 72.1 + 0.4\ attendance\)	\(time\_studying\)
\(\widehat{lifespan} = 87.4 - 1.2\ cigarettes\)	\(exercise\)
\(\widehat{lifespan} = 87.4 - 1.2\ cigarettes\)	\(time\_socializing\)
\(\widehat{wage} = 14.0 + 2.1\ grad\_education\)	\(experience\)
\(\widehat{wage} = 14.0 + 2.1\ grad\_education\)	desire to effect \(social\_good\)
\(\widehat{literacy} = 54 + 12\ network\_access\)	\(wealth\)