Wildcats are wells drilled to find and produce oil and/or gas in an improved area or to find a new reservoir in a field previously found to be productive of oil or gas or to extend the limit of a known oil or gas reservoir.
The variables in the table are defined as follows:
Y = the number of wildcats drilled
X2 = the price of the wellhead in the previous period
(In constant dollars: 1980 = 100)
X3 = domestic output
X4 = GNP at constant dollars (1980 = 100)
X5 = trend variable, 1948 = 1, 1949 = 2, …1978 = 31
Consider the regression model based on this equation:
Yt = b1 + b2X2t + b3X3t + b4X4t + b5X5t + u t --- (1)
(a) Run the regression equation (1) above in EViews 8 and show the regression result.
(b) Explain the regression equation (1) above in terms of economic relationship between the dependent and independent variables. State and explain the expected signs of the coefficients of this model?
(c) Interpret the OLS regression results shown above in terms of:
(i) Economic interpretation of the results.
(ii) Econometric/statistical interpretation of the results.
(d) Are the empirical results in accordance with prior expectations? Explain
|Due By (Pacific Time)
||12/09/2015 12:00 am