A new study is released in which the authors state that individuals who have a lot of debt start fewer new businesses. The authors did not, however, control for the education levels of individuals in the study. Individuals with higher education levels have more debt due to student loans and are more likely to start new businesses. Omitting education thus creates a:
A. Positive bias, so the study is understating the true impact of debt on entrepreneurship.
B. Positive bias, so the study is overstating the true impact of debt on entrepreneurship.
C. Negative bias, so the study is understating the true impact of debt on entrepreneurship.
D. Negative bias, so the study is overstating the true impact of debt on entrepreneurship.
E. None of the above.
Answer: A. Positive bias, so the study is understating the true impact of debt on entrepreneurship.