Suppressor Variables in Multiple Regression

Regression · Medium · Free problem
In a multiple regression $y \sim x_1 + x_2$, both $\hat{\beta}_1$ and $\hat{\beta}_2$ have significant t-statistics. But when you run the simple regression $y \sim x_1$ alone, $\hat{\beta}_1$ is no longer significant. What could cause this? Explain the mechanism and provide a concrete example.

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