In the panel regression analysis of beer taxes on traffic deaths, the estimation period is 1982-1988 for the 48 contiguous U.S. states. To test for the significance of time fixed effects, you should calculate the F-statistic and compare it to the critical value from your F_q,_∞ distribution, where q equals A)6. B)7. C)48. D)53.

Question

Quizplus · Accepted Answer

The F-statistic for testing the significance of time fixed effects in a panel data analysis with an estimation period from 1982 to 1988 involves comparing the variation across time periods. Since the period spans 7 years, and the test involves comparing each year against a base year, we have 6 degrees of freedom (1983-1988, with 1982 often serving as the base year), hence q equals 6.

In the Panel Regression Analysis of Beer Taxes on Traffic