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Columns: state; year; cpi, the consumer price index; population; packs, packs of cigarettes per capita; income, total state personal income (nominal); tax, the average state, federal and local excise taxes per pack (cents); price, the average price per pack including taxes (cents); taxs, the average excise taxes per pack including sales tax (cents). Added by the declared transforms: rprice = price / cpi, the real price; lrprice = log(rprice); lpacks = log(packs); rincome = income / population / cpi, real per capita income; lrincome = log(rincome); salestax = (taxs - tax) / cpi, the real general sales tax per pack; cigtax = tax / cpi, the real cigarette-specific tax per pack; and the intermediate columns income_pc and sales_tax_nominal.","file_sha256":"629e887a8104d483d450a9bbe487cb5613e62d116c4ecc84d6c8893b7393fcd2","format":"csv","frame_sha256":null,"generator":null,"kind":"file","licence":"GPL-2 | GPL-3 (R package AER); fetched, not redistributed.","member":null,"object":null,"params":{},"path":null,"read_kw":{},"records":null,"role":"agent","sha256":"629e887a8104d483d450a9bbe487cb5613e62d116c4ecc84d6c8893b7393fcd2","transforms":[{"args":{"args":{"left":"price","right":"cpi"},"name":"rprice","op":"ratio"},"op":"derive"},{"args":{"args":{"column":"rprice"},"name":"lrprice","op":"log"},"op":"derive"},{"args":{"args":{"column":"packs"},"name":"lpacks","op":"log"},"op":"derive"},{"args":{"args":{"left":"income","right":"population"},"name":"income_pc","op":"ratio"},"op":"derive"},{"args":{"args":{"left":"income_pc","right":"cpi"},"name":"rincome","op":"ratio"},"op":"derive"},{"args":{"args":{"column":"rincome"},"name":"lrincome","op":"log"},"op":"derive"},{"args":{"args":{"left":"taxs","right":"tax"},"name":"sales_tax_nominal","op":"diff"},"op":"derive"},{"args":{"args":{"left":"sales_tax_nominal","right":"cpi"},"name":"salestax","op":"ratio"},"op":"derive"},{"args":{"args":{"left":"tax","right":"cpi"},"name":"cigtax","op":"ratio"},"op":"derive"}],"url":"https://raw.githubusercontent.com/vincentarelbundock/Rdatasets/1dcc2bf5f955cc1224a3e1307256e1fe86b68dae/csv/AER/CigarettesSW.csv"}},"difficulty":"M","id":"paper_repro.stock_watson_2007.eq12_16.agent","level":"T2","meta":{"acceptable_tools":["infer.iv_2sls"],"answer_format":{"figure_transform":"identity","round_to":null,"unit_scale":1.0},"cluster":"stock_watson_2007","contamination":{"benchmark_first_public":"2007-01","gold_in_public_repo":true,"model_reported_cutoff":null,"url":"https://econweb.umd.edu/~chao/Teaching/Econ422/IV%20Regression%202.pdf"},"expected_tool":"infer.iv_2sls","family":"iv","headline_keys":{"infer.iv_2sls":["coef.lrprice"]},"kind":"agent","known_deviation":null,"locator":"Stock and Watson (2007), Chapter 12, cigarette demand, 1995 cross-section, TSLS with the real general sales tax per pack and the real cigarette-specific tax per pack (two instruments) (equation (12.16) as the AER package's CigarettesSW examples number it), coefficient on ln(P cigarettes)","n_published":48,"paper":"stock_watson_2007","question_states":[],"reference":{"cite":1,"steps":[{"args":{"dataset":"cigarettes","endog":["lrprice"],"exog":["lrincome"],"instruments":["salestax","cigtax"],"se":"HC1","subset":"year == 1995","y":"lpacks"},"tool":"infer.iv_2sls","why":"Equation (12.16): TSLS of log packs per capita on the log real price with log real per capita income, instrumented by the real general sales tax per pack and the real cigarette-specific tax per pack (two instruments), 1995, heteroskedasticity-robust errors."}]},"se_policy":{"basis":"Stock and Watson report heteroskedasticity-robust standard errors throughout; the authors' lecture notes print the Stata run behind these equations as 'ivreg ..., r'.","convention":"heteroskedasticity-robust HC1","never_required":false,"stated_in_question":true},"target":"eq12_16","trap_tools":[]},"question":"Stock and Watson, Introduction to Econometrics (2nd edition), Chapter 12, equation (12.16): using the 1995 cross-section of the 48 continental U.S. states, estimate by two-stage least squares the price elasticity of cigarette demand, the effect of the log of the real price per pack (taxes included) on the log of packs per capita, with the log of real per capita income as an included exogenous regressor, using as instruments the real general sales tax per pack and the real cigarette-specific tax per pack (two instruments). Use heteroskedasticity-robust standard errors. Report the coefficient on the log real price.","requires":[],"runner":null,"sources":["stock_watson_2007.eq12_16.paper","stock_watson_2007.eq12_16.software"],"split":"public","suite":"paper_repro","tags":["paper_repro","stock_watson_2007","iv"],"target":"agent","tool":null,"truth":"Stock, J. H. and Watson, M. W. (2007). Introduction to Econometrics, 2nd edition. Boston: Pearson Addison Wesley. Chapter 12, the demand for cigarettes. Stock and Watson (2007), Chapter 12, cigarette demand, 1995 cross-section, TSLS with the real general sales tax per pack and the real cigarette-specific tax per pack (two instruments) (equation (12.16) as the AER package's CigarettesSW examples number it), coefficient on ln(P cigarettes) (source stock_watson_2007.eq12_16.paper); software reference stock_watson_2007.eq12_16.software: linearmodels 7.0: the reference specification of stock_watson_2007 eq12_16 (infer.iv_2sls, figure 'coef.lrprice') on an independent code path"}