Is the following statement True False or Uncertain You will

Is the following statement True, False or Uncertain. You will need to justify your answer.

The presence of omitted variables calls into question the use of a simple linear regression model y=b0 + b1x + u unless one uses homogenous subsamples as a means of controlling for other variables. So, in a wage equation where the focus is on the impact of education, the sample could be restricted say to females with the same occupation and level of experience.

Solution

Ans True. Omitted variables need to be included in the model but when using homogenous subsamples as means of controlling for other variables we do not need to specify omitted variables since the aim is to exclude them in the first place itself