Please help!

4. (25 points) In class, we talked about identifying intertemporal labour supply. The basid idea behind the regressions that were run is that we wanted to see if individual's worked more hours when they saw a pay bump as our models would predict. Specially, we were interested in running the following regressiOn: he'd. = 50 + l'wrd + Em where hid is hours worked by individual 2' On a given day at and wad is the individual's wage that day. a. (5 points) Give the main reason that much of this literature has focused on taxi drivers and bike couriers to estimate the above regression. b. (10 points) Give one reason why if you ran the above regression on taxi drivers your estimate of {5'1 might suffer from bias. Be clear on what two conditions must be satistied for your reason to generate bias. c. (10 points) In order to get rid of the bias you found in part (b), some economists have used rain as an instrumental variable to estimate the above regression. Discuss the validity of this instrument