Suppose that we have data on 1000 people. Each of these people are either from California, Texas, or Hawaii. We have various lifestyle variables on each person (e.g. age, gender, etc.). We are interested in comparing the income of people in California versus the income of people in Texas using linear regression. Is it okay to drop data of those people who are from Hawaii? Would we not lose any information if we did this?
Wouldn't is depend on how many people are in each group?