The Phantom Menace of Omitted Variables: A Comment
This note demonstrates that in applied regression analysis, the variance of a coefficient of interest may decrease from the inclusion of a control variable, contrasting with Clarke’s assertion (2005, 2009) that the variance can only increase or stay the same. Practitioners may thus be well advised to include a relevant control variable on this basis alone, particularly when it is weakly correlated with the variable of interest.
Vance, C. and N. Ritter (2012), The Phantom Menace of Omitted Variables: A Comment. Conflict Management and Peace Science, 29, 2, 233-238