Exact(12)
But the problem of omitting variables remains unresolved.
The results of their study revealed that omitting variables that are highly correlated with one another and contain little additional information on the performance of departments can cause a major influence on the computed efficiency measures.
The condensation procedure, i.e., the reduction of the size of the model, is carried out by substituting out variables that are to be endogenous and are of less interest to the analysis and presentation of the simulation results, and by omitting variables that are to be exogenous and not shocked in the simulations.
Even though we are able to control for a large set of background characteristics in our specifications, if we are still omitting variables that explain maternal grandparental death and young women's labor force participation, IV estimates are likely to be biased.
Omitting variables based on correlation and existing scientific evidence is a reasonable approach to reduce multicollinearity [ 32].
Furthermore, relative importance of variables was assessed by omitting variables one-by-one from the multivariable model as suggested by Heinze and Schemper [ 10].
Similar(48)
First, omitted variables may drive both actual sales and investment.
Notably, it appears that omitted variables bias is important here.
Three key concerns frequently raised in the literature are: unobserved heterogeneity; omitted variables; identification problem.
Findings are robust to corrections for potential sample selection, omitted variables or endogeneity bias.
This makes it difficult to control for the impact of correlated omitted variables.
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