Use the data set, SAFETY.XLS, discussed in the previous example for this question.

This data set contains T = 60 observations on Y = accident losses and X = hours spent in safety training.

(a) Create the explanatory variables you would use in a distributed lag model with lag length equal to 4. (If you are having trouble, look in the file SAFETY1.XLS, which contains the answer to this question.) How many observations do the explanatory variables have?

(b) Using your answer to (a), recreate the table in the example above.

(c) Create the explanatory variables you would use in a distributed lag model with lag length equal to 2. How many observations do the explanatory variables have?

(d) Using your answer to (c), estimate the distributed lag model with q = 2.