Do cell phones distract drivers and cause accidents? Worried that this is happening, many states recently have passed legislation to reduce distracted driving. Fourteen states now have laws making handheld cell phone use while driving illegal, and 44 states have banned texting while driving. This problem looks more closely at the relationship between cell phones and traffic fatalities. Table 5.11 describes the variables in the data set Cellphone_2012_homework.dta.

(a) While we don't know how many people are using their phones while driving, we can find the number of cell phone subscriptions in a state (in thousands). Estimate a bivariate model with traffic deaths as the dependent variable and number of cell phone subscriptions as the independent variable. Briefly discuss the results. Do you suspect endogeneity? If so, why?

(b) Add population to the model. What happens to the coefficient on cell phone subscriptions? Why?

(c) Add total miles driven to the model. What happens to the coefficient on cell phone subscriptions? Why?

(d) Based on the model in part (c), calculate the variance inflation factor for population and total miles driven. Why are they different? Discuss implications of this level of multicollinearity for the coefficient estimates and the precision of the coefficient estimates.

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TABLE 5.11 Variables for Cell Phones and Traffic Deaths Data Variable name year state state_numeric numberofdeaths cell subscription population total_miles_driven Description Year State name State name (numeric representation of state) Number of traffic deaths Number of cell phone subscriptions (in thousands) Population within a state Total miles driven within a state for that year (in millions of miles)