Econometrics 1. Consider using a panel data set that records income, race, age, and annual savings for the same set of individuals in several years to find the effect of those variables on annual savings. (a) What concerns would arise from estimating these effects using pooled OLS? (b) If year fixed effects are included, can age be included in a regression model that will be estimated by first differences? Why or why not? (c) Which variables could be included in a regression model includes individual-specific fixed effects?
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