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  3. 1 23 points consider the following binary variable version of...

Question: 1 23 points consider the following binary variable version of...

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1. (23 points) Consider the following binary variable version of the fixed effects model. Consider the exarnple of Fatality Rate (%) and Beer Taxes (X,t) with a panel data of 48 states and 7 years. We use binary variables to denote the individual states. The regressor Drxi is a binary variable for Texas that equals 1 when iTX and 0 otherwise. The binary variable for California DCAi is omitted. for i 1,2,., 48 and t 1982, 1983, ..., 1988. You do not need to explain your reasoning for (a)-(f).) (a) The slope of TX in 1983 is (b) The intercept of TX in 1983 is (c) The slope of MA in 1983 is (d) The intercept of MA in 1983 is (e) The slope of CA in 1983 is (f) The intercept of CA in 1983 is (g) (5 points) Why dont we include Dcai in the above regression?
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