21 Jul WHICH OF THESE ASSUMPTIONS IS MOST LIKELY VIOLATED IF POLICE BUDGET DEPENDS ON MURDER RATE?
murd Show more Econometrics 1. Consider the regression model of: murderratet = 0 + 1policebudgett + t where murderratet is the annual murder rate in Fresno in year t policebudgett is the annual police budget in Bakersfield. The data set available has one observation for each of the last 40 years. (a) What assumptions must hold for OLS to give an unbiased estimate of the 1the structural effect of increasing the police budget on the murder rate? (i) Which of these assumptions is most likely violated if policebudgett depends onmurderratet-1? (b) What assumptions must hold for OLS to give a consistent estimate of the 1 the structural effect of increasing the police budget on the murder rate? (i) Which of these assumptions is most likely violated if police budget depends on murder rate? Show less
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