1. Use CRIME4 for this exercise. (i) Add the logs of each wage variable in the data set and estimate the model by first differencing. How does including these variables affect the coefficients on the...

1. Use CRIME4 for this exercise.

(i) Add the logs of each wage variable in the data set and estimate the model by first differencing. How does including these variables affect the coefficients on the criminal justice variables in Example 13.9?

(ii) Do the wage variables in (i) all have the expected sign? Are they jointly significant? Explain.