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How can omitted variable bias be addressed?

How can omitted variable bias be addressed?

Math   Statistics-And-Probability   
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Answer #1

In statistics ommited variable bias occurs when a statistical model leaves out one or more relevant variables.

The bias results in the model attributing the effect of the missing variables to those that were included.

More specifically, ommited variable bias is the bias that appears in the estimates of paramaters in a regression analysis,

when the assumed specification is incorrect in that it omits an independent variable that is a determinant of the dependent variable and correlated with one or more of the included independent variables.

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