OCC The Rate of Fatal Motor Vehicle Accidents Questions
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Use the dataset fatality.xlsx provided on the class website to answer the following
questions. The dataset contains one observation for each of the lower 48 states for
each year between 1982 and 1988, for a total of 336 observations. We will use the
following variables from this dataset:
• mrall: Rate of fatal motor vehicle accidents in a given year (number of traffic
deaths per 10,000 people in the state)
• dry: Percentage of the state’s population living in “dry” counties (i.e. counties
that prohibit alcohol sales)
• perinc: Measures per capita income
Before conducting the analysis multiple the fatality rate by 100 to get the number of
traffic deaths per 1 million people in the state (data$mrall = data$mrall*100).
a) Regress the rate of fatal motor vehicle accidents on the percentage of dry counties
in a state. What are the results? (Remember to use robust standard errors.)
b) Test the null hypothesis that the slope coefficient on dry is equal to zero at the 5%
significance level. What does that tell you about the effect of alcohol control laws on
motor vehicle fatalities?
c) Run a second regression of the rate of fatal motor vehicle accidents on the
percentage of dry counties and per capita income (again using robust standard
errors). What are the results? What do these results tell you about the effect of
alcohol control laws on motor vehicle fatalities?
d) What is a good explanation for why the estimated coefficient on dry in part (c)
has the opposite sign of the estimated coefficient on dry in part (a)?
e) Test the null hypothesis that the coefficient on dry equals 0 at the 5% significance
level. Test the null hypothesis that the coefficient on perinc equals 0 at the 5%
significance level. Test the null hypothesis that both the coefficients on dry and
perinc are equal to 0 at the 5% significance level.
f) Plot a 95% confidence set for the coefficients on dry and perinc.
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