ps5_Fall2023

Table 1 The Effect of Seatbelt Usage on Traffic Deaths: Regression Results Dependent variable: fatalityrate (1) (2) (3) (4) (5) Coefficient on seat belt usage ( ) ( ) ( ) ( ) ( ) State characteristic control variables a ? No Yes Yes Yes Yes State fixed effects? No No Yes Yes Yes Year fixed effects? No No No Yes Yes F -statistic testing the hypothesis that the state fixed effects are zero – – (p< ) (p< ) F -statistic testing the hypothesis that the year fixed effects are zero – – – (p< ) (p< ) HAC (clustered) SEs? No No No No Yes n Notes: All regressions include an intercept. Heteroskedasticity-robust standard errors appear in parentheses below estimated coefficients; p-values appear in parentheses beneath heteroskedasticity-robust F-statistics. a Regressions with “state characteristic control variables” include the following regressors: ba08 drinkage21 speed65 speed70 lnincome. Question 2 (24p) The data file RENTAL.dta include rental prices and other variables for college towns in 1980 and in 1990. The idea is to see whether a stronger presence of students affects rental rates. The unobserved effects model is log(rent it ) = β 0 + δ 0 y90 t + β 0 log(pop it ) + β 2 log(avginc it ) + β 3 pctstu it + a i + u it Variables needed are explained in below Variables in RENTAL.dta Variable Definition pop City population avginc Average income pctstu Student population as a percentage of city population (during the school year) y90 =1 for 1990, zero otherwise.