Posted: November 26th, 2015

STATA – Econometric s

STATA – Econometrics

Problem Set 5 (Chapters 10-11)
Chapter 10 Empirical Exercise:
Use the Seatbelts data set to complete the exercises below.
1. Run three regressions
a. Run a regression of the traffic fatality rate on seat belt usage, speed limits,

the blood alcohol limit, the
drinking age, log of per capita income and mean age using ordinary least squares

estimation.
b. Fit the same model controlling for state fixed effects
c. Fit the same model controlling for both state and year fixed effects.
2. Create a table with results for each regression.
3. Answer the following questions:
a. How do you interpret the coefficient on the seat belt usage variable in each of

the three regressions?
b. Does controlling for state fixed effects affect your results? If so, what does

the change in the coefficient on
the seat belt usage variable tell you about the relationship between the unobserved

state fixed effects, seat belt
usage and traffic fatalities?
4. Estimate the model including a time trend instead of the year fixed effects.

Which model is more
appropriate? How do you interpret the time trend?
5. Run a regression of seat belt usage on speed limits, the blood alcohol limit,

the drinking age, log of per capita
income and mean age and the seat belt enforcement variables. Interpret the

coefficients on the seat belt
enforcement variables.
a. How does changing from secondary to primary enforcement affect traffic

fatalities?
Chapter 11 Empirical Exercise:
1. Are the self-employed less likely to have health insurance than wage earners? Is

this difference economically
significant? Is it statistically significant?
2. In what other ways do the self-employed differ from wage earners? Discuss
3. Estimate a probit model examining the determinants of whether an individual has

health insurance.
a. Estimate a basic model including only the self-employment variable and

benchmark model.
b. Calculate and interpret the marginal effect of self-employment on the

probability of having
health insurance.
4. Estimate a probit model for health status, including marginal effects. What do

your results indicate about the
effect of self-employment on health? Estimate three models:
i. a simple model controlling only for self-employment,
ii. a second model adding the health insurance variable,
iii. a third model adding in other covariates which you believe belong in the

model.
5. Repeat part (4) using a logit model in place of the probit model. Are there any

significant differences?

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