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A large proportion of road fatalities involve a driver who has been drinking alcohol.Numerous studies have attempted to study the impact of various government policiesdesigned to discourage drink driving and therefore to investigate the effectiveness ofthese policies in reducing the road toll. Here we use data from the US where the observations refer to each of the n=48 US states(excluding Alaska and Hawaii) for the years 1982 and 1988. The key relationship ofinterest here is the impact of a beer tax on traffic deaths. The first of these is measuredby the real tax on a case of beer which is the beer tax in 1988 dollars (beertax). Themeasure of traffic deaths is the fatality rate (fr), which is the number of annual trafficdeaths per 10,000 people in the population in the state. (i) Using 0L5 to estimate the relationship between the fatality rate (fr) and the beertax (beertax) for 1982 and 1988 separately yields: 7’17: 2.01 + 0.15beertax (1982) (0.14) (0.19)n = 48, R2 = .013 f}: 1.86 + 0.44beertax (1988) (0.11) (0.16)n = 48, R2 = .134 Compare the two sets of results. What do they imply about the relationshipbetween fatality rate and the beer tax? Is this what you would expect? [3 marks]
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