Suppose a researcher believes that the occurrence of natural
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Suppose a researcher believes that the occurrence of natural disasters, such as earthquakes, leads to increased activity
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Suppose a researcher believes that the occurrence of natural disasters, such as earthquakes, leads to increased activity in the construction industry. The researcher decides to collect province-level data on employment in the construction industry of an earthquake-prone country, and regress this variable on an indicator variable that equals 1 if an earthquake took place in that province in the last five years. a. Should the researcher include province fixed effects in order to control for location-specific characteristics of the labor market? b. What can the researcher do to control for location effects?
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