Question: Use the data in MATHPNL for this exercise. You will do a fixed effects version of the first differencing done in Computer Exercise 11 in

Use the data in MATHPNL for this exercise. You will do a fixed effects version of the first differencing done in Computer Exercise 11 in Chapter 13. The model of interest is math4it 5 d1y94t 1 p 1 d5y98t 1 g1log1rexppit 2 1 g2log1rexppi,t21 2 1 c1log1enrolit 2 1 c2lunchit 1 ai 1 uit, where the first available year (the base year) is 1993 because of the lagged spending variable.

(i) Estimate the model by pooled OLS and report the usual standard errors. You should include an intercept along with the year dummies to allow ai to have a nonzero expected value. What are the estimated effects of the spending variables? Obtain the OLS residuals, v^it.

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