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Writing down this equation is tightly linked to drawing this DAG from above: The role of \(\varepsilon_i\) in equation (7 y_i = \beta_0 + \beta_1 x_i + \beta_2 z_i + \varepsilon_i \tag{7 This would now mean that by running our regression, informed by the wrong DGP, what we estimate is in fact this: y_i = b_0 + b_1 x_i + (b_2 z_i + e_i) = b_0 + b_1 x_i + u_i