Why the estimated coefficient on dry has the opposite sign

Assignment Help Econometrics

Reference no: EM133736157

Problem: The Rate of Fatal Motor Vehicle Accidents

Use the dataset fatality.xlsx provided on the class website to answer the following questions. The dataset contains one observation for each of the lower 48 states for each year between 1982 and 1988, for a total of 336 observations. We will use the following variables from this dataset:

1) Mrall: Rate of fatal motor vehicle accidents in a given year (number of traffic deaths per 10,000 people in the state)

2) Dry: Percentage of the state's population living in "dry" counties (i.e. counties that prohibit alcohol sales)

3) Perinc: Measures per capita income

Before conducting the analysis multiple the fatality rate by 100 to get the number of traffic deaths per 1 million people in the state (data$mrall = data$mrall*100).

I. Regress the rate of fatal motor vehicle accidents on the percentage of dry counties in a state. What are the results? (Remember to use robust standard errors.)

II. Test the null hypothesis that the slope coefficient on dry is equal to zero at the 5% significance level. What does that tell you about the effect of alcohol control laws on motor vehicle fatalities?

III. Run a second regression of the rate of fatal motor vehicle accidents on the percentage of dry counties and per capita income (again using robust standard errors). What are the results? What do these results tell you about the effect of alcohol control laws on motor vehicle fatalities?

IV. What is a good explanation for why the estimated coefficient on dry in part (III) has the opposite sign of the estimated coefficient on dry in part (I)?

V. Test the null hypothesis that the coefficient on dry equals 0 at the 5% significance level. Test the null hypothesis that the coefficient on perinc equals 0 at the 5% significance level. Test the null hypothesis that both the coefficients on dry and perinc are equal to 0 at the 5% significance level.

VI. Plot a 95% confidence set for the coefficients on dry and perinc.

Reference no: EM133736157

Questions Cloud

Develop an estimated simple linear regression model : Develop an estimated simple linear regression model that can be used to predict the alumni giving rate, given the graduation rate. Describe and analyze

Essay on how context illuminates the meaning : Essay on how context illuminates the meaning of Amichai's poem, "God's Change, Prayers are Here to Stay." Your essay should draw on your close reading

Pestle forces that affect airline industry : Derive one to two PESTLE forces that affect the airline industry. You need to provide recent examples as well.

How did president coolidge try to convince american public : How did President Coolidge try to convince the American public that newspapers being a profitable business was not harmful to their presentation of the news?

Why the estimated coefficient on dry has the opposite sign : What is a good explanation for why the estimated coefficient on dry in part (III) has the opposite sign of the estimated coefficient on dry in part (I)?

Management focus on health and wellbeing compared : There is less management focus on health and wellbeing compared with the first year of the pandemic'

Describe the political structure : Describe the political structure, religion, society and culture of those civilizations. Why did they develop around rivers?

Understanding complexities of costs-scheduling parameters : Explain how you feel about being a project manager and understanding the complexities of costs, scheduling parameters,

Describe and apply the components of gordon : Describe and apply the components of Gordon's functional health patterns as it applies to toddlers.

User Account

All Pages