A researcher plans to study the effect of police force on crime using data from

Question

A researcher plans to study the effect of police force on crime using data from a large sample of US counties. He computes the covariance matrix of the variables CR (county's crime rate), PCPF (per capita size of the county's police force), and Unemployment (county's unemployment rate). The sign of the covariance between any pair of variables is as follows: The researcher regresses the variable CR on PCPF only, but you know that Unemployment is a relevant omitted variable, which has positive effect on the crime rate. Determine the sign of the 'inconsistency.'

Explanation / Answer

the sign of the iconsistency is + because as you can see when is CR and CR is + and it is the same for the other variables!

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