The question gives the following model: $ln(h_i$)=α+$β_1$$ln(I_i$)+$β_2$$D_{2i}$+$β_3$$D_{3i}$+$β_4$$U_i$+$η_i$
This is cross-sectional data 2008-2010 for 5028 individuals living in the UK. h = happiness, I = income, $D_{2i}$ = 1 if year is 2009, $D_{3i}$ if year is 2010 and U is the UK unemployment rate.
The first question is asking what are the problems of estimating this model by OLS.
I think since we have only three values for unemployment, such a model will cause perfect collinearity problem. However, I don't know how to explain the intuition clearly. The answer says 1,$D_{2}$, $D_{3}$ are perfectly collinear with $U_i$, but I don't know what is the reason.