The Norwegian government wants to know whether restricting the opening hours of liquor stores reduces alcohol consumption. Holger, an employee of Statistics Norway, is asked to investigate this research question. He uses panel data for n=60 municipalities observed in T = 10 time periods. The data set contains information on per capita alcohol consumption (in liters per year) in municipality i in year t (alcoholit) and on the number of hours that alcoholit=0+1ln(hoursot)+uit by OLS and obtains the following estimation results. - regress alcohol inhours, robust Linear regression a) Test the null hypothesis that 1=0 at a 1% significancelevel. b) Use the above estimation results to predict the change in alcohol consumption if the opening hours of liquor stores are reduced by 20 percent. c) Marit, Holger's colleague, suggests augmenting the model with municipality fixed effects (i) alcoholit=0+1ln(hoursit)+i+uit Explain how you could estimate model (1). d) Holger decides to estimate a model that includes both municipality and year fixed effects. Both Holger and Marit are confident that by including municipality and year fixed effects the estimated coefficient on ln (hoursit) cannot suffer from omit- ted variable bias problems. Do you agree with Holger and Marit? The Norwegian government wants to know whether restricting the opening hours of liquor stores reduces alcohol consumption. Holger, an employee of Statistics Norway, is asked to investigate this research question. He uses panel data for n=60 municipalities observed in T = 10 time periods. The data set contains information on per capita alcohol consumption (in liters per year) in municipality i in year t (alcoholit) and on the number of hours that alcoholit=0+1ln(hoursot)+uit by OLS and obtains the following estimation results. - regress alcohol inhours, robust Linear regression a) Test the null hypothesis that 1=0 at a 1% significancelevel. b) Use the above estimation results to predict the change in alcohol consumption if the opening hours of liquor stores are reduced by 20 percent. c) Marit, Holger's colleague, suggests augmenting the model with municipality fixed effects (i) alcoholit=0+1ln(hoursit)+i+uit Explain how you could estimate model (1). d) Holger decides to estimate a model that includes both municipality and year fixed effects. Both Holger and Marit are confident that by including municipality and year fixed effects the estimated coefficient on ln (hoursit) cannot suffer from omit- ted variable bias problems. Do you agree with Holger and Marit