Homework Help is Here – Start Your Trial Now!
Math
Statistics
The Norwegian gover ts to know w restricting the opening hours of liquor stores reduces alcohol consumption. Holger, an employee of Statistics Norway, is asked to investigate this research question. He uses panel data for n = 60 municipalities observed in T = 10 time periods. The data set contains information on per capita alcohol consumption (in liters per year) in municipality i in year t (alcoholit) and on the number of hours that liquor stores were open during year t in municipality i (hoursit). Holger estimates alcoholit po + Biln(hoursit) + Uit by OLS and obtains the following estimation results. . regress alcohol Inhours, robust Linear regression alcohol Inhours cons Coef. 5.288235 2.768777 Robust Std. Err. .7486464 5.686286 t 0.49 P>|t| Explain how you could estimate model (1). Number of obs = 0.626 R-squared Root MSE alcoholit = Bo+piln(hoursit)+a+Uit [95% Conf. Interval] -8.398742 a) Test the null hypothesis that B₁ = 0 at a 1% significance level. b) Use the above estimation results to predict the change in alcohol consumpti if the opening hours of liquor stores are reduced by 20 percent. c) Marit, Holger's colleague, suggests augmenting the model with municipality fixed effects (a) 0.0745 .9568 600 13.9363 (1)

The Norwegian gover ts to know w restricting the opening hours of liquor stores reduces alcohol consumption. Holger, an employee of Statistics Norway, is asked to investigate this research question. He uses panel data for n = 60 municipalities observed in T = 10 time periods. The data set contains information on per capita alcohol consumption (in liters per year) in municipality i in year t (alcoholit) and on the number of hours that liquor stores were open during year t in municipality i (hoursit). Holger estimates alcoholit po + Biln(hoursit) + Uit by OLS and obtains the following estimation results. . regress alcohol Inhours, robust Linear regression alcohol Inhours cons Coef. 5.288235 2.768777 Robust Std. Err. .7486464 5.686286 t 0.49 P>|t| Explain how you could estimate model (1). Number of obs = 0.626 R-squared Root MSE alcoholit = Bo+piln(hoursit)+a+Uit [95% Conf. Interval] -8.398742 a) Test the null hypothesis that B₁ = 0 at a 1% significance level. b) Use the above estimation results to predict the change in alcohol consumpti if the opening hours of liquor stores are reduced by 20 percent. c) Marit, Holger's colleague, suggests augmenting the model with municipality fixed effects (a) 0.0745 .9568 600 13.9363 (1)

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.6: Summarizing Categorical Data
Problem 23PPS
See similar textbooks
icon
Related questions
Question
100%
The Norwegian government wants to know whether restricting the opening hours of liquor stores reduces alcohol consumption. Holger, an employee of Statistics Norway, is asked to investigate this research question. He uses panel data for n = 60 municipalities observed in T = 10 time periods. The data set contains information on per capita alcohol consumption (in liters per year) in municipality i in year t (alcoholit) and on the number of hours that liquor stores were open during year t in municipality i (hoursit). Holger estimates by OLS and obtains the following estimation results. regress alcohol Inhours, robust Linear regression alcohol alcoholit Bo + ßiln(hoursit) + Uit B Inhours cons Coef. 5.288235 2.768777 Robust Std. Err. .7486464 5.686286 t 0.49 P>|t| Number of obs = 0.626 R-squared Root MSE alcoholit = Bo+piln(hoursit) + ai + Uit [95% Conf. Interval] -8.398742 0.0745 .9568 a) Test the null hypothesis that B₁ = 0 at a 1% significance level. b) Use the above estimation results to predict the change in alcohol consumption if the opening hours of liquor stores are reduced by 20 percent. c) Marit, Holger's colleague, suggests augmenting the model with municipality fixed effects (a) 600 13.9363 (1) Explain how you could estimate model (1). d) Holger decides to estimate a model that includes both municipality and year fixed effects. Both Holger and Marit are confident that by including municipality and year fixed effects the estimated coefficient on In(hoursit) cannot suffer from omit- ted variable bias problems. Do you agree with Holger and Marit?
Transcribed Image Text:The Norwegian government wants to know whether restricting the opening hours of liquor stores reduces alcohol consumption. Holger, an employee of Statistics Norway, is asked to investigate this research question. He uses panel data for n = 60 municipalities observed in T = 10 time periods. The data set contains information on per capita alcohol consumption (in liters per year) in municipality i in year t (alcoholit) and on the number of hours that liquor stores were open during year t in municipality i (hoursit). Holger estimates by OLS and obtains the following estimation results. regress alcohol Inhours, robust Linear regression alcohol alcoholit Bo + ßiln(hoursit) + Uit B Inhours cons Coef. 5.288235 2.768777 Robust Std. Err. .7486464 5.686286 t 0.49 P>|t| Number of obs = 0.626 R-squared Root MSE alcoholit = Bo+piln(hoursit) + ai + Uit [95% Conf. Interval] -8.398742 0.0745 .9568 a) Test the null hypothesis that B₁ = 0 at a 1% significance level. b) Use the above estimation results to predict the change in alcohol consumption if the opening hours of liquor stores are reduced by 20 percent. c) Marit, Holger's colleague, suggests augmenting the model with municipality fixed effects (a) 600 13.9363 (1) Explain how you could estimate model (1). d) Holger decides to estimate a model that includes both municipality and year fixed effects. Both Holger and Marit are confident that by including municipality and year fixed effects the estimated coefficient on In(hoursit) cannot suffer from omit- ted variable bias problems. Do you agree with Holger and Marit?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Glencoe Algebra 1, Student Edition, 9780079039897…
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Algebra
ISBN:
9781680331141
Author:
HOUGHTON MIFFLIN HARCOURT
Publisher:
Houghton Mifflin Harcourt
Holt Mcdougal Larson Pre-algebra: Student Edition…
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL
SEE MORE TEXTBOOKS