ch10-1 - Chapter 10 Regression with Panel Data(Part 1 Trafc...

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Chapter 10 Regression with Panel Data (Part 1)
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Traffic Deaths and Alcohol Taxes There are approximately 40,000 highway traffic fatalities each year in US. Approximately one-third of fatal crashes involve a driver who was drinking. One study estimates that as many as 25% of drivers on the road between 1AM and 3AM have been drinking. A driver who is legally drunk is at least 13 times as likely to cause a fatal crash as a driver who has not been drinking. We study how effective government policies designed to discourage drunk driving actually are in reducing traffic deaths.
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Panel Data The state traffic fatality data we will study are panel data . Data are for n = 48 states, where each state is observed in T = 7 time periods (1982, ..., 1988). Panel data consist of observation on the same n entities at two or more time periods T . If the data set contains observations on the variables X and Y , then the data are denoted ( X it , Y it ) , i = 1, ..., n and t = 1, ..., T , where the first subscript, i , referers to the entity being observed, and the second subscript, t , refers to the date at which it is observed.
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