What Happens When You Omit Important Variables From Your Regression Model

We’ll understand what is Omitted Variable Bias and illustrate its calculation using a real-world data set

We‘ll study the consequences of failing to include important variables in a linear regression model. For illustration, we’ll base our discussion on a real world data set of automobile characteristics. Our goal will be to formulate a well-known result in statistical modeling called Omitted Variable Bias and to illustrate the calculation using the sample data set.

The automobiles …

bias linear regression omitted-variable-bias regression regression-analysis statistics variables