Question: Consider the following panel data regression with a single explanatory variable Y it = 0 + 1 X it + u it . In each

Consider the following panel data regression with a single explanatory variable

Yit = 0 + 1Xit + uit.

In each of the examples below, you will be adding entity and time fixed effects. Indicate the total number of coefficients that need to be estimated.

(a) The effect of beer taxes on the fatality rate, annual data, 1982-1988, nine U.S. regions (New England, Pacific, Mid-Atlantic, East North Central, etc.).

(b) The effect of savings rates on per capita income, data for three decades (1960-1969, 1970-1979, 1980-1989; one observation per decade), 104 countries of the world.

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