Model 2: OLS, using observations 1948-1978 (T = 31)

Dependent variable: Y

Coefficient Std. Error t-ratio p-value

const -29.9915 9.19225 -3.2627 0.00299 ***
X2 2.61046 0.528741 4.9371 0.00004 ***
l_X3 21.8166 4.69038 4.6513 0.00008 ***
X4 -0.0167132 0.00266791 -6.2645 <0.00001 ***

Mean dependent var 10.64613 S.D. dependent var 2.351515

Sum squared resid 58.14747 S.E. of regression 1.467518
R-squared 0.649479 Adjusted R-squared 0.610532
F(3, 27) 16.67607 P-value(F) 2.50e-06
Log-likelihood -53.73652 Akaike criterion 115.4730
Schwarz criterion 121.2090 Hannan-Quinn 117.3428
rho 0.293739 Durbin-Watson 1.138677

B0= The intercept is negative so dont need to interpret the intercept

X2=per barrel price in dollar. The estimated value of coefficient associated with x2 is equal to 2.61046
which is significant at one percent level of significance , as the p value is less than 0.01.

The value of estimated B2= 2.61046 implies that one dollar increase in price of per barrel will
increase number of wild cat drilling by 2 units.

l_X3= log of domestic output and the parameter associated with this is B3=21.8166 implies that
one percent change in of domestic output will change wild cat drilling 21 percent. The relation is
significant at one percent level of significance.

X4=GNP and the parameter of X4 is B4= -0.0167132 impliying a significant negative

relationship between GNP and wild cat drilling. One dollar increase in GNP will reduce wild cat
drilling by -0.0167132 units.

The individual parameters are significant at one percent level of significance..

F statistics

F calculated is equal to 16.67607 and the associated f tabulated with v1=3, and v2= 27 is equal to
2.2987. as the calculated F is greater than F tabulated so we reject the null hypothesis and
conclude that the model is good fit or the model as a whole is significant.
Coefficient of determination

R-squared=0.649479 implies that 62 percent variation in wildcat drilling is explained by our

estimated model.