Introductory Econometrics: A Modern Approach 6th Edition by Jeffrey M Wooldridge

Exercise 17

Use the data in COUNTYMURDERS to answer this questions. Use only the data for 1996.

(i) How many counties had zero murders in 1996? How many counties had at least one execution? What is the largest number of executions?

(ii) Estimate the equation

by OLS and report the results in the usual way, including sample size and R-squared.

(iii) Interpret the slope coefficient reported in part (ii). Does the estimated equation suggest a deterrent effect of capital punishment?

(iv) What is the smallest number of murders that can be predicted by the equation? What is the residual for a county with zero executions and zero murders?

(v) Explain why a simple regression analysis is not well suited for determining whether capital punishment has a deterrent effect on murders.