Quiz 10

You are studying the impact of urbanization on air pollution using panel data for 100 cities worldwide from 2000 to 2020. You plan to include city and year fixed effects.

1. A new nationwide environmental regulation passed in 2010 applies equally to all cities within a country. Its effect on pollution will not be captured by city or year fixed effects.
1. True
2. False
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2. A major flood in 2015 affected only a few cities in one country. If this event influenced both urbanization and pollution in those cities, its effect would not be fully captured by city or year fixed effects.
1. True
2. False
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3. Year fixed effects account for any shocks or global events that impact all cities in a relatively similar manner in a given year, like a global recession.
1. True
2. False
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4. A peer wants to account for whether a city is in a coastal area or not. In a model with city and year fixed effect it is possible to include a dummy variable for whether a city is coastal or not.
1. True
2. False
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5. The Kyoto Protocol was adopted on December 11, 1997, in Kyoto, Japan. It entered into force on February 16, 2005, after a sufficient number of countries ratified it. The protocol is a global climate treaty in which countries agree to certain environmental changes they need to do. A year fixed effect would potentially net out the effects of the enactment of this protocol.
1. True
2. False
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