A researcher investigating the determinants of crime in the United Kingdom has data for
42 police regions over 22 years.She estimates by OLS the following regression

\ln ( \mathrm { cmrt } ) _ { i t } = \alpha _ { i } + \phi _ { t } + \beta _ { 1 } \text { unrtm } _ { i t } + \beta _ { 2 } \text { proyth } _ { i t } + \beta _ { 3 } \ln ( p p ) _ { i t } + u _ { i t } ; i = 1 , \ldots , 42 , t = 1 , \ldots , 22

where

\mathrm { cmrt }

is the crime rate per head of population, unrtm is the unemployment rate of males, proyth is the proportion of youths,

p p

is the probability of punishment measured as (number of convictions)/(number of crimes reported).

\alpha

and

\phi

are area and year fixed effects, where

\alpha _ { i }

equals one for area

i

and is zero otherwise for all

i

, and

\phi _ { t }

is one in year

t

and zero for all other years for

t = 2 , \ldots , 22 . \phi _ { 1 }

is not included. (a) What is the purpose of excluding

\phi _ { 1 }

? What are the terms

\alpha

and

\phi

likely to pick up? Discuss the advantages of using panel data for this type of investigation.

In the Panel Regression Analysis of Beer Taxes on Traffic Fq,∞F _ { q , \infty }Fq,∞​

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In the Panel Regression Analysis of Beer Taxes on Traffic $F _ { q , \infty }$

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