When faced with the prospect of omitted variables bias (or unobserved heterogeneity) , we have so far discussed three options: (1)we can ignore the problem and suffer the consequences of biased and inconsistent estimators; (2) we can try to find and use a suitable proxy variable for the unobserved variable; or (3) we can assume
that the omitted variable does not change over time and use the fix ed effects or first differencing methods from Chapters 13 and 14. The first response can be satisfactory if the estimates are coupled with the direction of the biases for the key parameters. For
example, if we can say that the estimator of a positive parameter , say , the effect of job
training on subsequent wages, is biased toward zero and we have found a statistically
significant positive estimate, we have still learned something: job training has a positive
effect on wages, and it is likely that we have underestimated the effect. Unfortunately ,
the opposite case, where our estimates may be too large in magnitude, often occurs,
which makes it very difficult for us to draw any useful conclusions.
有人能解释一下那个例子么,就是for example那段,麻烦请问we have found a statistically
significant positive estimate 这个要怎么得到?
Unfortunately ,
the opposite case, where our estimates may be too large in magnitude, often occurs,
which makes it very difficult for us to draw any useful conclusions.是为什么?谢谢!


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