Business, 13.03.2020 17:27, lerasteidl

A researcher plans to study the causal effects of police on crime using data from a random sample of U. S. counties. He plans to regress the county’s crime rate on the (per capita) size of the county’s police force. a) explain why this regression is likely to suffer from omitted variables bias. Which variables would you add to regression to control for important omitted variables?
b) use your answer to (a) and the expression for omitted variables bias given in Equation (6.1) to determine whether the regression will likely over- or underestimate the effect of police on the crime rate.

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A researcher plans to study the causal effects of police on crime using data from a random sample of...