Essay
Consider the following panel data regression with a single explanatory variable
Yit = β0 + β1Xit + uit.
In each of the examples below, you will be adding entity and time fixed effects. Indicate the total number of coefficients that need to be estimated.
(a)The effect of beer taxes on the fatality rate, annual data, 1982-1988, nine U.S. regions (New England, Pacific, Mid-Atlantic, East North Central, etc.).
(b)The effect of the minimum wage on teenage employment, annual data, 1963-2000, five Canadian Regions (Atlantic Provinces, Quebec, Ontario, Prairies, British Columbia).
(c)The effect of savings rates on per capita income, data for three decades (1960-1969, 1970-1979, 1980-1989; one observation per decade), 104 countries of the world.
(d)The effect of pitching quality in baseball (as measured by the Team ERA)on the winning percentage, annual data, 1998-1999 season, 1999-2000 season, 30 teams.
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(a)16 coefficients (6 time fixed effects...View Answer
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