The file TRAFFIC2.RAW contains 108 monthly observations on automobile accidents, traffic laws, and some other variables for California from January 1981 through December 1989. Use this data set to answer the following questions. (i) During what month and year did California’s seat belt law take effect? When did the highway speed limit increase to 65 miles per hour?
(ii) Regress the variable log(totacc) on a linear time trend and 11 monthly dummy variables, using January as the base month. Interpret the coefficient estimate on the time trend. Would you say there is seasonality in total accidents?
(iii) Add to the regression from part (ii) the variables wkends, unem, spdlaw, and belt- law. Discuss the coefficient on the unemployment variable. Does its sign and mag- nitude make sense to you?
(iv) In the regression from part (iii), interpret the coefficients on spdlaw and beltlaw. Are the estimated effects what you expected? Explain.
(v) The variable prcfat is the percentage of accidents resulting in at least one fatality. Note that this variable is a percentage, not a proportion. What is the average of prcfat over this period? Does the magnitude seem about right?
(vi) Run the regression in part (iii) but use prcfat as the dependent variable in place of log(totacc). Discuss the estimated effects and significance of the speed and seat belt law variables.