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The data set CAMPUS from Wooldridge is collected by an undergraduate Michigan State University student for his project to analyze campus crime rates across the U

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The data set CAMPUS from Wooldridge is collected by an undergraduate Michigan State University student for his project to analyze campus crime rates across the U.S. In this data, Icrime denotes the logarithm of the number of crimes committed in a year in the university | campus; lenroll denotes the logarithm of the total number of students enrolled in the university; Ipolice denotes the logarithm of the number of police officers employed by the university; private is a dummy variable indicating whether the university is private. The econometric model is given by: Icrime = Bo + Bilenroll + B2 police +B3private + u. Assume that all the classical linear regression model assumptions are satisfied. The regression output is provided below. Parts of the output are intentionally withheld. = • reg lcrime lenroll lpolice priv Source SS df MS 97 54.04 0.0000 = Model 1 Residual 1 Number of obs F(3, 93) Prob > F R-squared Adj R-squared Root MSE Total 1 183.119479 0.6237 .84721 lcrime Coef. Std. Err. P>It! [95% Conf. Interval] lenroll 1 1 police priv .9462363 .5391599 .26656 -5.102549 .1460992 .1507161 .2835986 1.160198 6.48 3.58 0.94 -4.40 0.000 0.001 0.350 0.000 .6561123 .2398675 -.2966105 -7.406473 1.23636 8384523 8297305 -2.798626 cons a. (3 points) Explain why it is crucial to assume that all the classical linear regression model assumptions are satisfied for this question. b. (3 points) State the null and alternative hypothesis to test whether the elasticity of crime with respect to enrollment is unity. c. (3 points) Conduct the test in part b. d. (4 points) Interpret the slope coefficient for private. e. (5 points) Regressing lenroll on lpolice yields an R2 of 0.5848. Do you reject Ho: B2=B3=0 at the 10 percent level of significance?