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. [3 marks] (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? [5 marks] (c) Interpret the OLS regression results shown above in terms of: (i) Economic interpretation of the results. [8 marks] (ii) Econometric/statistical interpretation of the results. [6 marks] (d) Are the empirical results in accordance with prior expectations? Explain [3 marks]