You are interested in studying the tradeoff between time spent sleeping and work

Question

You are interested in studying the tradeoff between time spent sleeping and working in a sample of individuals aged 23-65. Suppose that the true model is: Slee where sleep and totwrk (total work) are measured in minutes per week and age is measured in years. a) Suppose that, rather than estimating the true model, you estimate: sleep-00 + 1 totwrk + u Will OLS on this model generate an unbiased estimate of the true relationship between totwrk and sleep? If not, speculate on which direction the bias will go?

Explanation / Answer

OLS on this model will generate an unbiased estimate of the true relationship between totwrk and sleep. OSL estimated of a relationship between the dependent variable and an independent variable does not affect by removing of an independent variable from the true model. The bias due to removing an independent variable from the true model will go to the error.

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