Assume that you've been hired by the surgeon general of the United States to study the determinants of smoking behavior and that you estimate the following cross-sectional model based on data for all 50 states (standard errors in parentheses): Ci^ = 100 - 9.0E+ 1.0i - 0.04T - 3.0V + 1.5R (3.0) (1.0) (0.04) (1.0) (0.5) t = -3.0 1.0 -1.0 -3.0 3.0 where Ci = number of cigarettes consumed per day per person in the ith state E = ave. yeras of education for persons over 21 in the i-th state I = average income in the ith state (thousands of dollars) T = tax per package of cigarettes in the i-th state (cents) V = the number of video ads against smoking aired on the five largest radio networks in the ith state **I only need help with c, d, and e.

a. Develop and test (at the 5-percent level) appropriate hypotheses for the coefficients of the variables in this equation.

b. Do you appear to have any irrelevant variables? Do you appear to have omitted variables? Explain your answer.

c. Let's assume that your answer to part b was 'yes' to both. Which problem is more important to solve first -- irrelevant variables or omitted variables? Why?

d. One of the purposes of running the equation was to determine the effectiveness of antismoking advertising on television and radio. What is your conclusion?

e. The surgeon general decides that tax rates are irrelevant to cigarette smoking and orders you to drop the variable from your equation. Given the following results, use our four specification criteria to decide whether you agree with her conclusion. Carefully explain your reasoning (standard errors in parentheses): Ci^ = 101 - 9.1E + 1.0i -3.5V + 1.6R (3.0) (0.9) (1.0) (0.5) Sum of R^2 = .40 N = 50 (states)