Question

A researcher believes that traffic fatalities are likely to increase in adverse winter weather conditions. Comment on the following methods designed to estimate the impact of snow on traffic fatalities in a panel data analysis like the one evaluating impacts of beer taxes on traffic accidents analyzed in class:

a) The researcher collects data on the average snowfall for each state and adds this regressor (AverageSnowi) to the regressions.
b) The researcher collects data on the snowfall in each state in each year and adds this regressor (Snowit) to the regressions.

Answer 1

In a panel data analysis, the researcher can add a regressor called Snowit, representing snowfall, to estimate the impact of snow on traffic fatalities.

Step-by-step explanation:

In a panel data analysis, a researcher collects data on various variables to evaluate their impact on a specific outcome. To estimate the impact of snow on traffic fatalities, the researcher can add a regressor called Snowit, which represents snowfall in each state in each year, to the regression model. This allows the researcher to analyze how snowfall is related to traffic fatalities.

For example, the researcher may find that as snowfall increases, the number of traffic fatalities also increases. This suggests that adverse winter weather conditions, characterized by heavy snowfall, have a significant impact on traffic fatalities.

This method allows the researcher to control for other factors that may influence traffic fatalities, such as driver behavior, road conditions, or vehicle characteristics, and focus specifically on the impact of snowfall.