Regressors
Once you understand the basics, the most important question becomes: How do we pick the regressors? We will consider four issues:
Left-Out Variables
You leave out a regressor by mistake. [sim]
Irrelevant Variables
You include a regressor by mistake. [sim] How much
difference does it make?
Multicollinearity
For either of the previous two issues, the regressors are correlated.
definition
