Consider the regression of Salesi = ?0 + ?1Pricei + ?2Promoi + ?3Weekendi + Ui, where Promoi and Weekendi are binary variables for if the particular observation was on promo (1 if promo, 0 otherwise), or comes from a weekend day (1 if weekend day, 0 otherwise). A member of your team informs you that all the promotions run for the products in your population were run on weekends. What identification challenge might you worry about? What identification challenge might you worry about?
A. Perfect multicollinearity
B. Heteroscedasticity
C. Imperfect multicollinearity
D. Endogeneity
Answer: A
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