Introduction In this article, I will discuss about the bias introduced in estimation of coefficient of a given explanatory variable due to the presence of confounding factors. After that, I will try to demonstrate about the effect of variable collinearity on estimation of coefficient.
Underlying structure Let us assume that we know about the underlying relationship between the explanatory variable (E), outcome variable (O), confounder ©, variable correlated with E (VE) and variable correlated with O (VO).