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2. In 2011, both Colorado and Florida had laws banning marijuana use and possession. By 2014, Colorado had passed a law that made use and

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2. In 2011, both Colorado and Florida had laws banning marijuana use and possession. By 2014, Colorado had passed a law that made use and possession of marijuana legal, but Florida had not. Suppose you have data on crime rates in both states, for 2011 and 2014. Let crime be the crime rate variable and suppose you have data for both Colorado and Florida in 2011 and 2014. a) Write down a difference-in-differences model that allows you to test whether the change in the law in Colorado increased crime. Which coefficient in your model measures the effect of the law? Which coefficient measures the effect of the time trend in both states? b) Suppose you can collect data on crime rates in both states from years prior to 2011. How would you use these data

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