In Estimating a Fixed Effects Model Using Panel Data, Which

question 35

Multiple Choice

In estimating a fixed effects model using panel data, which of the following variables will not be effective controls if you use a full set of (cross sectional) fixed effects for individuals?

• A) Year to year changes in income for individuals
• B) Yearly (cumulative) education attainment for individuals
• C) Income taxes paid
• D) Birthplace of the individual

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Definitions:

Tragedy

Tragedy is a form of drama based on human suffering that invokes an accompanying catharsis or pleasure in audiences.

Excessive Use

The overuse or misuse of a resource or product, often leading to depletion or damage of the resource and negative externalities.

Common Resources

Natural or man-made resources that are not owned by anyone, cannot be excluded from use, and are available for use by more than one person.

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive or negative.