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 CONTENTS vii

12.2 Using Latent Variables to Explain Observed Variables 406

12.3 Probit and Logit Models 410
12.4 Estimation 415
12.5 Interpreting Probit and Logit Coefficients 418
CASE STUDY: Econometrics in the Grocery Store 423
12.6 Hypothesis Testing about Multiple Coefficients 427
CASE STUDY: Civil Wars 432
Conclusion 434 • Further Reading 435 • Key Terms 436
• Computing Corner 436 • Exercises 440

IV ADVANCED MATERIAL 447

Time Series: Dealing with Stickiness over Time 449

13. 1 Model ing Autocorrelation 450
13.2 Detecting Autocorrelation 453
13.3 Fixing Autocorrelation 457
CASE STUDY: Using an AR( I) Model to Study Global Temperature
Changes 460
13.4 Dynamic Models 462
13.5 Stationarity 465
CASE STUDY: Dynamic Model of Global Temperature 47 1
Conclusion 475 • Further Reading 476 • Key Terms 477
• Computing Corner 477 • Exercises 479

Advanced OLS 481

14. 1 How to Derive the OLS Estimator and Prove Unbiasedness 481
14.2 How to Derive the Equation for the Variance of /j1 487
14.3 How to Derive the Omitted Variable Bias Conditions 489
14.4 Anticipating the Sign of Omitted Variable Bias 491
14.5 Omitted Variable Bias with Multiple Variables 494
14.6 Omitted Variable Bias due to Measurement Error 495
Conclusion 497 • Further Reading 497 • Key Term 498
• Computing Corner 498 • Exercises 498
viii CONTENTS

Advanced Panel Data 501

I 5.1 Panel Data Models with Serially Correlated E rrors SOI
I 5.2 Temporal Dependence w ith a Lagged Dependent Variable 503
I 5.3 Random Effects Models 507
Conclusion 509 • Further Readi ng 509 • Key Term S IO
• Computing Comer S 10 • Exercises S 13

Conclusion: How to Be an Econometric Realist 516

Further Reading 520

APPENDICES
Math and Probability Background 52 1
A. Summation 521
B. Expectation 521
C. Variance 522
D. Covariance 523
E. Correlation 524
F. Probabi lity Density Functions 524
G. Normal Distributions 526
H. Other Useful Distributions 532
I. Sampling 534
Further Reading 537 • Key Terms 537 • Computing Corner 537

Citat ions and Add it ional Notes 539

Guide to Review Questions 549

Bibliog raphy/Photo Credits 559

Glossary 568

Index 577
LIST OF FIGURES

I. I Rule # I 2
1.2 Weight and Donuts in Springfield 4
1.3 Regression Line for Weight and Donuts in Springfield 5
1.4 Examples of Lines Generated by Core Statistical Model (for Review
Question) 7
1.5 Correlation 10
1.6 Possible Relationships Between X, E, and Y (for Discussion
Questions) 12
1.7 Two Scenarios for the Relationship between Flu Shots and Health 14

2.1 Two Versions of Debt and Growth Data 25

2.2 Weight and Donuts in Springfield 27
2.3 Scatterplots of Violent Crime against Percent Urban, Single Parent,
and Poverty 31

3.1 Relationship bet,veen Income Growth and Vote for the Incumbent
President's Party, 1948-2012 46
3.2 Elections and Income Growth with Model Parameters Indicated 51
3.3 Fitted Values and Residuals for Observations in Table 3. 1 52
3.4 Four Distributions 55
3.5 Distribution of /J, 58
A

3.6 Two Distributions with Di fferent Variances of /J, 62

3.7 Four Scatterplots (for Review Questions on page 63) 64
A

3.8 Distributions of /J, for Different Sample Sizes 66

3.9 Plots with Different Goodness of Fit 72
3.10 Height and Wages 74
3.1 1 Scatterplot of Violent Crime and Percent Urban 77
3.12 Scatterplots of Crime against Percent Urban, Single Parent, and
Poverty with OLS Fitted Lines 78

ix
X LIST OF FIGURES

Distribution of p, under the Null Hypothesis for Presidential

A

4.1
Election Example 95
Distribution of p, under the Null Hypothesis with Larger Standard
A

4.2
Error for Presidential Election Example 99
4.3 Three t Distributions JOO
4.4 Critical Values for Large-Sample t Tests 102
4.5 1\vo Examples of p Values 107
4.6 Statistical Power for Three Values of p, Given a= 0.01 and a
One-S ided Alternative Hypothesis 110
4.7 Power Curves for Two Values of se(/J1) 113
4.8 Meaning of Confidence Interval for Example of 0.41 ± 0.196 118

5. 1 Monthly Retai l Sales and Temperature in New Jersey

from 1992 to 2013 129
5.2 Monthly Retai l Sales and Temperature in New Jersey with
December Indicated 130
5.3 95 Percent Confidence Intervals for Coefficients in Adult Height,
Adolescent Height, and Wage Models 134
5.4 Economic Growth, Years of School, and Test Scores 143

6. 1 Goal Differentials for Home and Away Games for Manchester City
and Manchester United 168
6.2 Bivariate OLS with a Dummy Independent Variable 171
6.3 Scatterplot of Obama Feeling Thermometers and Party
Identification 173
6.4 Three Difference of Means Tests for Review Questions 174
6.5 Scatterplot of Height and Gender 176
6.6 Another Scatterplot of Height and Gender 177
6.7 Fitted Values for Model with Dummy Variable and Control
Variable: Manchester City Example 180
6.8 Relation bet,veen Omitted Variable (Year) and Other Variables 187
6.9 Confidence Intervals for Universal Male Suffrage Variable in
Table 6.8 190
6. 10 Interaction Model of Salaries for Men and Women 192
6. 11 Various Fitted Lines from Dummy Interaction Models (for Review
Questions) 194
 LIST OF FIGURES xi

6.12 Heating Used and Heating Degree-Days for Homeowner Who

Instal led a Programmable Thermostat 196
6.13 Heating Used and Heating Degree-Days with Fitted Values for
Different Models 199
6.14 Marginal Effect of Text Ban as Total Miles Changes 204

7. I Average Life Satisfaction by Age in the United States 208

7.2 Life Expectancy and per Capita GDP in 2011 for All Countries
in the World 210
7.3 Linear and Quadratic Fitted Lines for Life Expectancy Data 211
7.4 Examples of Quadratic Fitted Curves 212
7.5 Global Temperature over Time 215
7.6 Hypothetical Investment Data (for Review Questions) 217
7.7 Linear-Log Model for Life Expectancy Data 220

8.1 Robberies and Police for Large Cities in California 250

8.2 Robberies and Police for Specified Cities in California 250
8.3 Robberies and Police for Specified Cities in California with
City-Specific Regression Lines 251
8.4 Robberies and Police for Hypothetical Cities in California 257
8.5 Difference-in-Difference Examples 270
8.6 More Difference-in-Difference Examples (for Review Question) 274

9. I Conditions for Instrumental Variables 294

9.2 Simultaneous Equation Model 309

I 0. 1 Compliance and Non-compliance in Experiments 334

11. 1 Drinking Age and Test Scores 366

11.2 Basic Regression Discontinuity Model, Y; =(Jo+ (J, T; + fJ2(Xi; - C) 369
11.3 Possible Results with Basic RD Model 370
11.4 Possible Results with Differing-Slopes RD Model 374
11.5 Fitted Lines for Examples of Polynomial RD Models 375
11.6 Various Fitted Lines for RD Model of Form
Y; = flo + fl, T; + fh(Xi; - C) + fh(Xi; - C)T; (for Review Question) 377
xi i UST OF FIGURES

11.7 Smaller Windows for Fitted Lines for Polynomial RD Model in

Figure I 1.5 379
11.8 Bin Plots for RD Model 380
11.9 Binned Graph of Test Scores and Pre-K Attendance 382
11.10 Histograms of Assignment Variable for RD Analysis 385
11.1 1 Histogram of Age Observations for Drinking Age Case Study 388

12. 1 Scatterplot of Law School Admissions Data and LPM Fitted Line 404
12.2 Misspec ification Problem in an LPM 405
12.3 Scatterplot of Law School Admissions Data and LPM- and
Probit-Fitted Lines 407
12.4 Symmetry of Normal Distribution 4 11
12.5 PDFs and CDFs 4 12
12.6 Examples of Data and Fitted Lines Estimated by Probit 416
12.7 Varying Effect of X in Probit Model 4 19
12.8 Fitted Lines from LPM, Probit, and Logit Models 427
12.9 Fitted Lines from LPM and Probit Models for Civil War Data
(Holdi ng Ethnic and Religious Variables at Their Means) 434
12. 10 Figure Included for Some Respondents in Global Warming Survey
Experiment 444

13. 1 Examples of Autocorrelation 452

13.2 Global Average Temperanire since 1880 455
13.3 Global Temperature Data 461
13.4 Data with Unit Roots and Sptirious Regression 468
13.5 Data without Unit Roots 469
13.6 Global Temperature and Carbon Dioxide Data 472

A. I An Example of a Probability Density Function (PDF) 525

A.2 Probabilities That a Standard Normal Random Variable
Is Less than Some Value 526
A.3 Probabilities That a Standard Normal Random Variable
Is Greater than Some Value 527
A.4 Standard Normal Distribution 528
A.5 1\vo x2 Distributions 533
A.6 Four F Distributions 535
R. 1 Identifying (30 from a Scatterplot 550
LIST OFTABLES

I. I Donut Consumption and Weight 3

2.1 Descriptive Statistics for Donut and Weight Data 26

2.2 Frequency Table for Male Variable in Donut Data Set 26
2.3 Frequency Table for Male Variable in Second Donut Data Set 27
2.4 Codebook for Height and Wage Data 29
2.5 Descriptive Statistics for State Crime Data 31
2.6 Variables for Wi nter Olympics Questions 39
2.7 Variables for Height and Wages Data in the United States 40

3.1 Selected Observations from Election and Income Data 51

3.2 Effect of Height on Wages 75
3.3 OLS Models of Crime in U.S. States 77
3.4 Variables for Questions on Presidential Elections and the Economy 86
3.5 Variables for Height and Wage Data in Britain 89
3.6 Variables for Divorce Rate and Hours Worked 89

4.1 Type I and Type II Errors 93

4.2 Effect of Income Changes on Presidential Elections 95
4.3 Decision Rules for Various Alternative Hypotheses 10 I
4.4 Critical Values fort Distribution 104
4.5 Effect of Height on Wages with t Statistics 104
4.6 Calculating Confidence Intervals for Large Samples 119
4.7 Variables for Height and Wage Data in the United States 123

5.1 Bivariate and Multivariate Results for Retail Sales Data 131
5.2 Bivariate and Multiple Multivariate Results for Height
and Wages Data 133

xiii
xiv LIST OF TABLES

5.3 Using Multiple Measures of Education to Study Economic Growth

and Education 142
5.4 Effects of Judicial Independence on Human Rights 154
5.5 Variables for Height and Wage Data in the United States 161
5.6 Variables for Cell Phones and Traffic Deaths Data 163
5.7 Variables for Speedi ng Ticket Data 164
5.8 Variables for Height and Wage Data in Britain 165

6. 1 Feel ing Thermometer Toward Barack Obama 172

6.2 Difference of Means Test for Height and Gender 176
6.3 Another Way to Show Difference of Means Test Results for
Height and Gender 178
6.4 Manchester City Example with Dummy and Continuous
Independent Variables 179
6.5 Using Different Excluded Categories for Wages and Region 183
6.6 Hypothetical Results for Wages and Region When Different
Categories Are Excluded 185
6.7 Difference of Means of Inheritance Taxes for Countries with
Universal Male Suffrage, 1816-2000 186
6.8 Multivariate OLS Analysis of Inheritance Taxes 189
6.9 Interpreting Coefficients in Dummy Interaction Model:
Yi = /Jo+ /J1Xi + (hDi + (hXi x Di 193
6. 10 Data from Programmable Thermostat and Home Heating Bills 197
6. 11 Variables for Monetary Policy Data 202
6. 12 Variables for Speedi ng Ticket Data 205

7. I Global Temperature, 1879-2012 2 16

7.2 Different Logged Models of Relationship bet,veen
Height and Wages 221
7.3 Determi nants of Major League Baseball Salaries, 1985-2005 223
7.4 Means and Standard Deviations of Baseball Variables 224
7.5 Means and Standard Deviations of Baseball Variables
for Three Players 225
7.6 Standardized Determinants of Major League Basebal l Salaries,
1985-2005 225
7.7 Unrestricted and Restricted Models for F Tests 233
7.8 Variables for Pol itical Instability Data 239
 LIST OF TABLES XV

7.9 Variables for Global Education Data 240

7. IO Variables for Height and Wage Data in Britain 241
7 .1 1 Variables for Speeding Ticket Data 242

8.1 Basic OLS Analysis of Burglary and Pol ice Officers 249
8.2 Example of Robbery and Police Data for Cities in California 255
8.3 Robberies and Police Data for Hypothetical Cities in California 257
8.4 Burglary and Police Officers, Pooled versus Fixed Effects Models 258
8.5 Burglary and Police Officers, for Multiple Models 265
8.6 Bilateral Trade, Pooled versus Fixed Effects Models 267
8.7 Effect of Stand Your Ground Laws on Homicide Rate per 100,000
Residents 272
8.8 Variables for Presidential Approval Data 280
8.9 Variables for Peace Corps Data 281
8.10 Variables for Instructor Evaluation Data 282
8.1 1 Variables for the HOPE Scholarship Data 283
8.12 Variables for the Texas School Board Data 284
8.13 Variables in the Cell Phones and Traffic Deaths Data 285

9.1 Levitt (2002) Results on Effect of Pol ice Officers on Violent Crime 289
9.2 Intluence of Distance on NICU Utilization (First-Stage Results) 298
9.3 Intluence of NICU Utilization on Baby Mortality 299
9.4 Regression Results for Models Relating to Drinking and Grades 300
9.5 Price and Quantity Supplied Equations for U.S. Chicken Market 3 13
9.6 Price and Quantity Demanded Equations for U.S. Chicken Market 3 14
9.7 Variables for Rainfall and Economic Growth Data 3 19
9.8 Variables for News Program Data 320
9.9 Variables for Fish Market Data 321
9.10 Variables for Education and Crime Data 322
9.1 1 Variables for Income and Democracy Data 323
xvi LIST OF TABLES

I 0. 1 Balancing Tests for the Progresa Experiment: Differences of

Means Tests Using OLS 331
10.2 First-Stage Regression in Campaign Experiment: Explaining
Contact 339
I 0.3 Second-Stage Regression in Campaign Experiment: Explaining
1\1rnout 340
I 0.4 Various Measures of Campaign Contact in 2SLS Model for
Selected Observations 341
10.5 First-Stage Regression in Domestic Violence Experiment:
Explaining Arrests 343
I 0.6 Selected Observations for Minneapolis Domestic Violence
Experiment 344
10.7 Using Different Estimators to Analyze the Results of the
Domestic Violence Experiment 345
I 0.8 Regression Results for Models Relating Teacher Payment
Experiment (for Review Questions) 352
I 0.9 Effect of Terror Alerts on Crime 355
10. 10 Variables for Get-out-the-Vote Experiment from Gerber and
Green (2005) 359
JO.I I Variables for Resume Experiment 361
I 0.12 Variables for Afghan School Experiment 363

I I. I RD Analysis of Prekindergarten 383

11.2 RD Analysis of Drinking Age and Test Scores 388
11.3 RD Diagnostics for Drinking Age and Test Scores 389
11.4 Variables for Prekindergarten Data 392
11.5 Variables for Congressional Ideology Data 394
11.6 Variables for Head Start Data 396

12. 1 LPM Model of the Probability of Admission to Law School 403

12.2 Sample Probit Results for Review Questions 418
12.3 Multiple Models of Probabil ity of Buying Store-Brand Ketchup 424
12.4 Estimated Effect of Independent Variables on Probability of Buying
Store-Brand Ketchup 425
12.5 Unrestricted and Restricted Probit Results for LR Test 430
 LIST OF TABLES xvii

12.6 Probit Models of the Determinants of Civi l Wars 433

12.7 Variables for Iraq War Data 441
12.8 Variables for Global Warming Data 442
12.9 Variables for Football Coach Data 444
12. 10 Variables for Donor Experiment 446
12. 11 Balance Tests for Donor Experiment 446

13. 1 Using OLS and Lagged Error Model to Detect Autocorrelation 456
13.2 Example of p-Transformed Data (for fi = 0.5) 458
13.3 Global Temperature Model Estimated by Using OLS and via
p- Transformed Data 462
13.4 Dickey-Fuller Tests for Stationarity 473
13.5 Change in Temperature as a Function of Change in Carbon Dioxide
and Other Factors 474
13.6 Variables for James Bond Movie Data 480

14. 1 Effect of Omitting X2 on Coefficient Estimate for X1 493

14.2 Variables for Winter Olympics Data 499

15. 1 Another Set of Variables for Winter Olympics Data 513

A. I Examples of Standardized Values 530

R. I Values of fio,fli ,/32, and /33 in Figure 8.6 554
 USEFUL COMMANDS FOR STATA

Task Command Example Chapter

Help help help summarize 2

Comment line • * This is a commem Jjne 2
Comment on command line I* *I use "C:\Dat.a.dla" I* This is a comment */
Continue line I* *I reg y X I X2 X3/•
•J X4 X5
Load Stata data file use use "C:\Data.dta" 2
Load text data fi le insheet in.sheet u.sjng "C:\Data.cxt'" 2
Display variables in memory list Jjst /*Lis1s all observatioll.~ for all variable.~ */ 2
list Y XI* List~ all observations for Y and X *I 2
list X in 1/10 /* Lists firs1 10 observation.~ for X *I 2
Descriptive sta1js1ics summarize summarize X 1 X 2 Y 2
f requency table tabulate tabulate XI 2
Scatter plOI scauer scatter Y X 2
scatter Y X. mlabel(name) / • Adds labels •/ 2
Limit data if summarize X 1 if X2 == 1 2
Not equal != summarize X 1 if X2 !-0 3
f4uaJ (a.~ used in if statement for example) summarize X 1 if X2 == 1 2
Missing data in Stata Stata creats missing data as having infini te vaJue. so
Iisl X 1 if X2 > 0 will include vaJues of X I for
which X2 is missing
Regression reg reg YX I X2 3
Heteroscedastic.ity robust regression • robust reg Y X I X2. robus1 3
Generate predicred values predic.t predic1 FittedY / * Run this after reg command */ 3
Add regres..~ion line to scatter plot twoway. lfit 1woway (scatter Y X)(l6t Y X) 3
Critkal value fort disttibution. two-sided invttail display im11ail( l20, .05/2) t• For model with 120 4
=
degrees of freedom and alpha 0.05: note that
we divide a.Jpha by 2 */
Critkal value fort distribution. one-sided invttail display im11ail( 120, .05) I* For model wi~l 120 4
=
degrees of freedom and alpha 0.05 *I
Critical value for normal distribution, two-sided invnonnal display inmomial(.975) / • For alpha= 0.05. note 4
that we dhride aJpha by 2 *I
Critical value for normal distribution, one-sided invnormal display inmomial(.05) 4
Two sided p values [ Reported in reg o utput] 4
One sided p values Hail display 2*ttail( J20. 1.69)/• For model with 120 4
degrees of freedom and at statistic of 1.69 •t
Confidence i ntervaJs [ Reported in reg output] 4
Difference of means test reg reg Y Dum / • Where Dum is a dummy variable*/ 6
Create an imeraction variable gen gen DumX = Dum * X 6

xviii
 USEFUL COMMANDS FOR STATA xix

Task Command Example Chapter

Create a squared variable gen gen x _sq =X"2 7

Create a Jogged variable gen gen X _Jog =log( X ) 7
Delete a variable drop drop X7
Produce standardized regression coefficients , beta reg Y X I X2, beta 7
Produce standardized variable egen =
egen X_std std(X) / • Creates variable called 7
x_std *I
F-te.~t tes1 = =0 / * Run this after regres..~ion with
test XI X2 7
XI and X2 in model */
Critical value for F test invF display invF(2. I 20. 0.95) / • Degrees of freedom 7
equal 2 and I 20 (order matters!) and alpha =
0.05 .,
Generate dummy variable.~ for each unit tabulate and tabulate City. generare(City_dum) g
generate
LSOV model for panel data reg reg Y X I X2 City_dum2 - City_dum&O g
De-meaned model for panel data xtreg xtreg Y XI X2. fe i(City) g
Tv,•o-\vay fixed.effecL~ xtreg xtreg Y XI X2 i.year Yr2- Yr 10. fe i(City) 8
2SLS model h•regress ivregress 2sls Y X2 X3 (X I = Z), first 9
Prob it probit probit Y X I X2 X3 12
Logit logit logit Y XI X2 X3 12
Critical value for chi-square te.~t invch.i2 display invchi2( I. 0.95) /* Degrees of freedom= 12
I and 0.95 confidence level •/
Accoum for auloc.orrelalion in time serie.~ dala prajs lssel Year 13
prais Y XI X2. core lwostep
Include lagged dependent variable L.Y reg Y L. Y X1 X2 /* Run cssel command firsl */ 13
Augmemed. Did::ey.fuJJer lest dfuller dfuller Y. trend lags( I) regress 13
Generale draws from standard normal momiaJ gen Noise= mormal(0,1) /* Length wiJJ be same 14
dist.ribution a.~ length of "ariables in memory */
lndkate co Slala unil and time variables l~~t tssel ID ti me 15
Panel model with aulocorrelaljon xtregar xcregar Y X I X2. fe rhotype(regress) cwostep 15
Include lagged dependent variable L.Y xtreg Y L. Y XI X2. fe i(ID) 15
Random effects panel model , re xcreg Y XI X2. re 15
USEFUL COMMANDS FOR R

Task Command Example Chapter

Help ·1 '?mean 2
Comment line # # l'bis is a comment 2
Load R da1a fi le Daia = "C:\ Da1a.RDa1a .. 2
Load text d ata file read.table Darn= read.table("C:\ Daia.txt ... header = TRUE) 2
Di.splay names of "ariables in memory object~ objects()# Will list names of all variables in memory 2
Display variables in memory [enter "ariable X 1 # Di.splay all values of this variable: enter directJy in console 2
name] or highlight in editor and press ctrl·r
X I [ I: JO) # Display first 10 value., of X I 2
Missing d ata in R NA
Mean mean mean(XI) 2
mean(XI. na.mt=TRUE) # Necessary if there are missing values
Variance var var(X I) 2
var(X I. na.rm=TRUE) # Necessary if there are missing vaJues
sqit(var(X I)) # This is the s1andard d eviation of X I
Minimum min min(X I. na.nn=TRUE) 2
Maximum max ma.x(X I, na.rm=TRUE) 2
Number of obsen•alions sum and is.finite sum(is.fi ni1e(X I)) 2
f requency table table table(X I)
Sc.atter plot plot plot(X. Y) 2
text(X. Y. name) # Adds labels from variable c.aUed '"name'" 2
Limit data (similar to an if statement) 0 plot(Y(X3<10). Xl (Xk JO)) 2
f4ual (as used in if statement. for example) mean(XJ(X2==1)) # Mean of X I for c~se., where X2 equals I
,_
Not equal .- mean(X I LX I !=OJ)# Meru, of XI for obsen,ations where XI is
not equal to O
Regression Im lm(Y -X I + X2) # Im stands for "linear model" 3
ResuJts = lm(Y- X) # Creates an objecl called "Results'" that 3
stores coefficient~. standard errors. fitted values and other
infom1ation about this regression
Di.splay results summary summary(Resulls) # Do this atl:ercreating "Re.~ull~" 3
l nstaU a pack.age ins1a1J.pack.age.~ install.packages('"AER'") # Only do LJ1is once for each computer 3
Load a package library library(AER) # Include in every R session in which we use
pack.age specified in c,ommand
Heteroscedas1icity robust regression ooeftest(Results. vc,o v = voovHC(ResullS. type= " HC I .. )) 3
# Need to install and load A.ER package for this command. Do
this after creating OLS regression object called "Results'"
Generme predicted values $fitted.values ResuJtsSfitted.values# Run after creating OLS regression object 3
called "Re.~ull~"
Add regression line to sc.aner plot abline abline(Resulls) # Run after plol command and after creating 3
'"Resulls" object based on a bivariate regression

xx
 USEFUL COMMANDS FOR R xxi

Task Command Example Chapter

Critical value for Ldistribution. two-sided qt qt(0.975, 120) # For alpha= 0.05 and 120degree.,offreedom: 4
divide alpha by 2
Critical value fort djstribution. one-sjded qt qt(0.95. 120) # For alpha= 0.05 and 120 degree., of freedom 4
Critical value for nomiaJ distribution. two-sided qnorm qnonn(0.975) # For alpha= 0.05: divide alpha by 2 4
Critical value for nomiaJ distrilxltion. one-sided qnorm qnonn(0.95) # For alpha= 0.05 4
Two sided p values LReported in summ.ary(Re.wlts) output)
One sided p values pt 2*( 1-pt(abs( I.69). 120) # For model with 120 degrees of 4
freedom and at statjstic of 1.69
Confidence intervaJs con6nt con6nt(Re.wlts. level = 0.95) # Do after creating OLS object 4
c-.alled '"Re.~ulL~"
Difference of means test Im lm(Y-Dum) # Where Oum is a dummy variable 6
Create an interact.ion variable DumX = Oum • X # Or use<- in place of=
Create a squared variable X_sq =X'2 7
Create a Jogged variable X_log =log( X) 7
Produce standardized regression coefficients .scale Res.std= lm(scale(Y) -scale(X I)+ sc~Je(X2)) 7
Display R squared Sr.squared .summary(Results)$r.squared 7
Critical value for F te.st qf qf(.95. dfl = 2. df2 = 120) # Degrees of freedom equal 2 and 7
120 (order matters!) and alpha = 0.05
LSDV model for panel data factor Resulls = lm(Y - XI + factor(country)) # Fac1or adds a 8
dummy variable for every value of variable c-.alled c-ountry
One-way fixed-effecl~ model (de-meaned) plm library(plm) 8
Resulls = plm(Y - XI+ X2+ X3. da1a = d1a.
index=c('"c-ountry'"). model= "with.in")
Tv,,o-way fixed-effec[s model (de-meaned) plm library(phn) 8
Resulls = plm(Y - XI+ X2+ X3 data= dta.
index=c('"c.ountry'". ")•ear"). model="within'".
efrect = '"rwoways")
2SLS model ivreg library(AER) 9
ivreg(Y - XI + X2 + X3 IZI + 22 + X2 + X3)
Generate draws from standard normal distribution rnonn Noise= rnonn(500) # 500 draws from standard nom1aJ 14
di.stributjon
Panel model with autocorrelation [See Computing Corner in Chapter 15] 15
Include Jagged dependent variable plm with Resulls = plm(Y - lag(Y) + X I + X2, data= dta, index= 15
lag(Y) c("ID-. "time"). effect= "iwoways")
Random effects panel model plm with ResullS = plm(Y -XI + X2. da1a = d1a. model= "random") 15
"random"
PREFACE FOR STUDENTS:
HOW TH IS BOOK CAN HELP YOU
LEARN ECONOMETRICS

"Less dull than t raditional texts."-Student A.H.

"It would have been immensely helpful for me to have a textbook li ke this in
my classes th roughout my college and graduate experience. It feels more like
an interactive lea rning experience than simply reading equations and facts out
of a book and being expected to absorb them ."-Student S.A.
"I wish I had had th is book when I was fi rst exposed to the materia l- it wou ld
have saved a lot of t ime and hair-pulling... ."-Student J.H.
"Materia l is easy to understand, hard to forget."-Student M.H.

This book introduces the econometric tools necessary to answer important

questions. Do antipoverty programs work? Does unemployment affect inflation?
Does campaign spending affect election outcomes? These and many more
questions not only are interesting but also are important to answer correctly if
we want to support policies that are good for people, countries, and the world.
When using econometrics to answer such questions, we need always to
remember a single big idea: correlation is not causation. Just because variable
Y rises when variable X rises does not mean that variable X causes variable Y to
rise. The essential goal is to figure out when we can say that changes in variable
X wi ll lead to changes in variable Y.
This book helps us learn how to identify causal relationships with three
features seldom found in other econometrics textbooks. First, it focuses on
the tools that economic researchers use most. These are the real econometric
techniques that help us make reasonable claims about whether X causes Y, and
by using these tools, we can produce analyses that others can respect. We' ll get
the most out of our data whi le recognizing the limits in what we can say or how
confident we can be.
Our emphasis on real econom.etrics means that we skip obscure econometric
tools that could come up under certai n conditions: they are not discussed here.
Econometrics is too often complicated by books and teachers trying to do too
much. This book shows that we can have a sophisticated understanding of
statistical inference without having to catalog every method that our instructor
had to learn as a student.
Second, this book works with a single unifying framework. We don' t start
over with each new concept; instead, we build around a core model. That means
xxii
 PREFACE FOR STUDENTS xxiii

there is a single equation and a unifying set of assumptions that we poke, probe,
and expand throughout the book. This approach reduces the learning costs of
moving through the material and al lows us to go back and revisit material. As
with any skill, we probably won't fully understand any given technique the
first time we see it. We have to work at it, we have to work with it. We'll
get comfortable, we' ll see connections. Then it will click. Whether the skill is
jumping rope, typing, throwing a basebal l, or analyzing data, we have to do things
many times to get good at it. By sticking to a uni fying framework, we have more
chances to revisit what we have already learned. You'll also notice that I' m not
afraid to repeat myself on the important stuff. Really, I' m not afraid to repeat
myself.
Third, this book uses many examples from the pol icy, pol itical, and economic
worlds. So even if you do not care about " two-stage least squares" or "maximum
likelihood" in and of themselves, you will see how understanding these techniques
will affect what you think about education policy, trade pol icy, election outcomes,
and many other interesting issues. The examples and case studies make it clear
that the tools developed in this book are being used by contemporary applied
economists who are actually making a di fference with their empirical work.
Real Econo,netrics is meant to serve as the primary course textbook in
an introductory econometrics course or as a supplemental text providing more
intuition and context in a more advanced econometric methods course. As
more and more public policy and corporate decisions are based on statistical
and econometric analysis, this book can also be used outside of course work.
Econometrics has infi ltrated into every area of our lives-from e ntertainment to
sports (I no longer spit out my coffee when I come across an article on regression
analysis of National Hockey League players}-and a working knowledge of basic
econometric techniques can help anyone make better sense of the world around
them.

What's In This Book?

The preparation necessary to use this book successfully is modest. We use basic
algebra a fair bit, being careful to explain every step. You do not need calculus.
We refer to calculus when useful, and the book certainly could be used by a course
that works through some of the concepts using calculus, but you can understand
everything without knowing calculus.
We start with two introductory chapters. Chapter 1 lays out the central
challenge in econometrics. This is the chal lenge of making probabilistic yet
accurate claims about causal relations bet\veen variables. We present experiments
as an ideal way to conduct research, but we also show how experiments in the
real world are tricky and can't answer every question we care about. This chapter
provides the " big picture" context for econometric analysis that is every bit as
important as the specifics that follow.
Chapter 2 provides a practical foundation related to good econometric
practices. In every econometric analysis, data meets sofl\vare, and if we're not
xxiv PREFACE FOR STUDENTS

careful, we lose control. This chapter therefore seeks to teach good habits about
documenting analysis and understanding data.
The five chapters of Part I constitute the heart of the book. They introduce
ordinary least squares (OLS), also known as regression analysis. Chapter 3
introduces the most basic regression model, the bivariate OLS model. Chapter
4 shows how to use OLS to test hypotheses. Chapters 5 through 7 introduce
the multivariate OLS model and appl ications. By the end of Part I, you will
understand regression and be able to control for anything you can measure. You'll
also be able to fit curves to data and assess whether the effects of some variables
differ across groups, among other ski lls that will impress your friends.
Part II introduces techniques that constitute the modem econometric toolkit.
These are the techniques people use when they want to get published-or
paid. These techniques build on multivariate OLS to give us a better chance of
identifying causal relations between two variables. Chapter 8 covers a simple yet
powerful way to control for many factors we can 't measure directly. Chapter 9
covers instn1mental variable techniques, which work if we can find a variable
that affects our independent variable but not our dependent variable. Instrumental
variable techniques are a bit funky, but they can be very useful for isolating causal
effects. Chapter 10 covers randomized experiments. Although ideal in theory, in
practice such experiments often raise a number of challenges we need to address.
Chapter l l covers regression disconti nuity tools that can be used when we' re
studying the effect of variables that were allocated based on a fixed rule. For
example, Medicare is available to people in the United States only when they tum
65; admission to certai n private schools depends on a test score exceeding some
threshold. Focusing on policies that depend on such thresholds turns out to be a
great context for conducting credible econometric analysis.
Part III covers dichotomous dependent variable models. These are simply
models in which the outcome we care about takes on two possible values.
Examples and case sn1dies cover include high school graduation (someone
graduates or doesn't), unemployment (someone has a job or doesn 't), and
all iances (two countries sign an all iance treaty or don' t). We show how to apply
OLS to such models and then provide more elaborate models that address the
deficiencies of OLS in this context.
Part IV supplements the book with additional useful material. Chapter 13
covers time series data. The first part is a variation on OLS; the second part
introduces dynamic models that differ from OLS models in important ways.
Chapter 14 derives important OLS results and extends discussion on specific
topics. Chapter 15 goes into greater detai l on the vast literature on panel data,
showing how the various strands fit together.
Chapter 16 concludes the book with tips on adopti ng the mind-set of an
econometric realist. In fact, if you are looking for an overall understanding of
the power and limits of statistics, you might want to read this chapter first-then
read it again once you've learned all the statistical concepts covered in the other
chapters.
Discovering Diverse Content Through
Random Scribd Documents
 CHAPTER XXVIII
DOWN THE CURRENT

When I was a boy in school, I one day ran across a translation of

Homer's Iliad and carried it home and read it afternoons for a week.
During those days I lived in the great pictures of the battles on the
plains of Troy, and though afterwards I had seldom thought of them,
they had never quite faded from my memory.
It was far indeed from Homer's Iliad to an ambush in an African
forest; but the fight that ensued when we walked into that hornets'
nest of black warriors nevertheless brought Homer's story vividly to
my mind. The spears, I think, suggested the resemblance; or
perhaps the wild swiftness of the fight. First an arrow came whistling
through the air and struck one of the men on the throat and went
through his neck half the length of the shaft. He spun round,
spattering me with dark blood that ran from a severed vein, and
went down under the feet of the bullocks without a word. Then the
bullocks turned, stampeded by the sight and smell of blood, and
crowded back upon the sheep and goats, and the porters dropped
their burdens and tried to run. O'Hara threw up his musket and
shattered the skull of a huge black who came at him with a knife like
the blade of a scythe, and, himself stooping to pick up the knife,
grappled with another and died, shrieking, from a spear-thrust up
under the ribs. Then one of the porters hurled a bundle at a man
who was about to cut him down, and the bundle broke and a shower
of yellow gold scattered in front of us, whereupon there was a short,
fierce rush for plunder.
Side by side with Arnold Lamont and Gleazen, emptying my pistol
into the crowd, I saw out of the corner of my eye that the blacks
were cutting their way into the heart of the caravan for slaves and
booty.
Imagine, if you can, that motley horde which had rushed upon us
out of the wood. Some, naked except for loin cloths, brandished
spears and howled like enraged maniacs; some, in queer quilted
armor and helmets with ostrich plumes, clumsily wielded trade
muskets; some advanced boldly under the cover of shields and
others, ranging through the underbrush, kept up a desultory flight of
arrows. It was primitive, unorganized, ferocious war.
"Mon dieu, what a spectacle!" Arnold exclaimed; then, "Now, my
friends, quick! To the left! While the thieves steal, we yet may
escape!"
Up from the mêlée, streaked with blood and dust, now came the
trader. "All, all ees gone!" he wailed, and waved his arms and
shrieked and stamped and cursed and jabbered on in Spanish.
Had our enemies been content to delay their plundering until they
had killed us all, not one of us would have escaped to tell the true
story of that bloody day. But at the sight of a rich caravan and loose
gold, the blacks, in the twinkling of an eye, were fighting among
themselves.
"Quick!" again cried Arnold's voice, strangely familiar in the midst of
that grotesquely unreal uproar, and as amazingly precise as ever.
"Quick, gentlemen! It is our only chance."
And with that, he, Gleazen, Matterson, the trader, Abe, and I took to
our heels into the bushes. The woods behind the line of the ambush
appeared to be deserted. At the foot of a ravine ran the creek. We
crossed it by a rude bridge of branches, hastily and silently climbed
the opposite bank, and stole off quite unobserved.
A hundred yards farther on, at the sound of a great thrash and
clatter, we dove into the undergrowth and lay hidden while a band of
blacks tore past us to the scene of battle. But getting hastily up as
soon as they were out of sight, we resumed our headlong retreat.
Every bush and tree darkly threatened us. Great rocks, deeply
clothed in moss and tumbled so together as to form damp holes and
caves, at once tempted us by their scores of hiding-places and filled
us with apprehension lest natives might have hidden there before
us. But as if we were playing the old game of follow-my-leader, we
scrambled up and down, and in and out, and always hard ahead,
until we again heard before us a rumble of voices and pounding feet,
and a second time, desperately, flung ourselves into the
undergrowth and lay all atremble while half a hundred naked
negroes, armed with bows and clubs and spears, came trotting,
single file, like wolves, and passed us not fifty feet away.
As they disappeared, and while we still dared not move, I saw
something stir not five English cubits from my face. I caught my
breath and stared at the thing. Ten feet ahead of it; the leaves and
ferns rustled, and twenty feet ahead of it then, twitching, it
disappeared. I broke out from head to foot in sweat. Unwittingly, we
had thrown ourselves down within hand's reach of a great serpent.
Whether or not newly gorged, and so too sleepy to resent our
nearness, it moved slowly away through the quivering undergrowth.
When we had put a mile between ourselves and the plundered
caravan, Matterson turned with an oath. "Poor Bud!" he said in his
hard, light voice. "At least, we'll hear no more of jujus and devils and
king's graves."
Gleazen shrugged and turned to the trader. "How far is the river?" he
asked.
"Mebbe one mile—mebbe two."
"Do you, sir, know the road?" Arnold asked.
The trader nodded and spread his hands as if in despair. "Know
heem? I know heem, yes! T'ree, ten, fifty time I come with slave
and ivory and hide—now all gone! Forty prime slave all gone!
Ev'ytheeng gone!"
Gleazen grunted.
"Let us go to the river," said Arnold.
"Heem reever go by town," wailed the trader. "Heem beeg town!
Walls so high and strong!"
"Ah, that is another matter," said Arnold. "But let us go forward at all
events. We may, for all that we can tell, strike the river below the
town."
So forward we went in the darkness, and a slow, tedious journey it
was, particularly for Abe and me, who helped Matterson along as
best we could; but we avoided the town by the sound of drumming
that issued from behind its walls, and having helped ourselves to
fruit from the patches of cultivated land that we passed, we at last
emerged from the darkness of the woods into the half light of a
great clearing, and saw a vast, black, living surface on which strange
lights played unsteadily. It seemed unbelievable that it really could
be the same river that we had left so long ago,—in the sense of all
that had happened, so very long ago,—and yet I knew, as I watched
Gleazen and Matterson, that it must be the same. The black, swift
current recalled to my mind the toil that we had expended in coming
so far to so little purpose. In which direction the creek lay that we
had entered on our way to the ill-fated hut, I had not the remotest
idea; but I looked a long time downstream toward the mission.
Bearing around in a rough half-circle, we worked slowly down the
bank, until the walls of the town itself were before us, at a safe
distance.
"Our boat," said Matterson, grimly, "is fifty miles away."
"Wait here," said I. "There'll be canoes under the town. I'll get one."
Gleazen made a motion as if to go himself, but Arnold shook his
head. "No; let Joe go first. He will learn where the canoes are, and
do it more quietly than we."
They all sat down by the edge of the water, and, leaving them, I
went on alone. It took all the courage I could muster; but having
rashly offered, I would not hesitate.
For one thing, it gave me time to think, and in a sense I desired to
think, although in another sense it came to me that I was more
afraid of my own thoughts than of all the walled towns in Africa. The
living nightmare through which we had passed had left me worn in
body and mind. That Uncle Seth, upon whom once I had placed
every confidence, should have died so tragic a death, now brought
me a fresh burst of sorrow, as if I realized it for the first time. It
seemed to me that I could hear his sharp yet kindly voice speaking
to me of little things in our life at Topham. I thought of one episode
after another in those earlier days, some of them, things that had
happened while my mother was alive; others, things that had
happened after her death; all, things that I had almost forgotten
long before. My poor uncle, I thought for the hundredth time—my
poor, poor uncle!
Then suddenly another thought came to me and I straightened up
and stood well-nigh aghast. By the terms of my uncle's will, of which
more than once he had told me, all that had been his was mine!
The river silently swept down between its high banks, past me who
stood where the waves licked at my feet, past the black walls of the
town, which stood like a sentinel guarding the unknown fastnesses
of the continent of Africa, past high hill and low gravel shoal and
bottomless morass, past pawpaw and pine palm and mangrove, to
the mission and the sea.
There I stood, as still as a statue, until after a long time I
remembered my errand and, like one just awakened, continued on
my way.
I found a score of canoes drawn up on the beach under the town,
and very carefully placing paddles by one that was large enough for
our entire party, I cautiously returned to the others and reported
what I had done. Together we all slipped silently along the shore to
the canoes, launched the one that I had chosen, and with a last
glance up at the pointed roofs of the houses and the sharpened
pickets of the stockade, silently paddled, all unobserved, out on the
strong current and went flying down into the darkness.
It had been one thing to row up stream against that current. It was
quite another, and vastly easier, even though three of us were
entirely ignorant of handling such a canoe, to paddle down the swift
waters of midstream. Exerting always the greatest care to balance
the ticklish wooden craft, which the blacks with their crude adzes
had hewn out of a solid log, we sent it, even by our clumsy efforts,
fairly flying past the trees ashore; and as it seemed that we had
struck the river many miles below the creek where we had left our
boat, we had hopes that the one night would bring us within striking
distance of the open sea. Indeed, I found myself watching every
point and bend, in hope that the mission lay just beyond it.
Estimating that daylight was still two hours away, we drew in shore
at Gleazen's suggestion, to raid a patch of yams or plantains.
"A man," he said arrogantly, but with truth, "can't go forever on an
empty stomach."
Luckless venture that it was—no sooner did the canoe grate on the
beach than a wakeful woman in a hut on the bank set up a
squealing and squalling. As we put out again incontinently into the
river, we heard, first behind us, then also ahead of us, the roll of
those accursed native drums.
To this very day I abhor the sound of drumming. It has a devilishly
haunting note that I cannot escape; and small wonder.
We swept on down the current, but now, here and there, the river-
banks were alive with blacks, and always the booming of drums ran
before us, to warn the country that we were coming. Once, as we
passed a wooded point, a spear flew over our heads and went
hissing into the water, and I was all for putting over to the other
bank. But Arnold, who could use his eyes and ears as well as his
head, cried, "No! Watch!"
All at once, under the dark bank of the river, there was screaming
and splashing and floundering. The torches that immediately flared
up revealed what Arnold, and now the rest of us, expected to see,
but they also revealed indistinctly another and more dreadful sight:
on the shore, running back and forth in great excitement, were
many men; but in the troubled water a negro was struggling in vain
to escape from the toils of a huge serpent, which was wrapping itself
round him and dragging him down into the river where it had been
lying in wait.
To me, even though I knew that that very negro had been watching
for a chance to waylay us, the sight of the poor fellow's horrible
death almost overcame me.
Not so with Matterson and Gleazen.
With a curse, Matterson cried, "There's one less of them now." His
light voice filled me with loathing.
And Gleazen softly laughed.
On down the river we went, with flying paddles, and round a bend.
But as we passed the bend, I looked back, and saw coming after us,
first one canoe, then two, then six, then so many that I lost all
count.
How far we had come in that one night, I had little or no idea; but it
was easy to see by the attitude of those who knew the river better
than I, that the end of our journey was close at hand. Glancing
round at our pursuers, Gleazen spoke in an undertone to Matterson,
and both they and the trader studied the shore ahead of us.
"A scant ten miles," Gleazen muttered; "only ten miles more."
I felt the heavy dugout leap forward under the fierce pull of our
paddles. The water turned away from the bow in foam, and we fairly
outrode the current. But fast though we were, the war fleets behind
us were faster. By the next bend they had gained a hundred yards,
by the next, another hundred. We now led them by a scant quarter
of a mile, and if Gleazen had estimated our distance rightly, they
would have had us long before we could reach port. But suddenly,
all unexpectedly, round the next bend, not half a mile away, the
mission sprang into sight.
There it stood, in the early morning sun, as clean and cool and still
as if it were a thousand miles away from Africa and all its wars.
"Give me your pistols," Arnold cried; and when we tossed them to
him and in frantic haste resumed our paddling, he coolly renewed
the priming and one by one fired them at our pursuers.
That the negroes had a gun we then learned, for they retorted by a
single shot; but the shot went wild and the arrows that followed it
fell short, and our pistols cooled their eagerness. So we swept in to
the landing by the mission, and beached the canoe, and ran up the
long straight path to the mission house as fast as we could go, while
the black canoemen paused in midstream and let their craft swing
with the current.
The place, as we came rushing up to it, was so quiet, so peaceful, so
free from any faintest sign of the terrible days through which we had
passed, that it seemed as if, after all, we had never left it; as if we
were waking from a troubled sleep; as if we had spent a thousand
years in the still, hazy heat of that very clearing. The face in the
window, the opening door, only intensified that uncanny sense of
familiarity.
The door opened, and the man we had seen before met us. His eyes
were stern and inhospitable.
"What?" said he. "Must you bring your vile quarrels and vile wars to
the very threshold of one whose whole duty here is to preach the
word of God?"
"Those," cried Arnold, angry in turn, but as always, precise in phrase
and enunciation, "are hard words to cast at strangers who come to
your gate in trouble."
"Trouble, sir, of your own brewing," the missionary retorted. "What
you have been up to, I do not know. Nor have I any wish to save
your rascally necks from a fate you no doubt richly merit."
"Your words are inclusive," I cried.
"They certainly include you, young man. If you would not be judged
by this company that you are keeping, you should think twice or
three times before embarking with it."
"Father!" said a low voice.
My heart leaped, but I did not turn my head. Down the river,
manned by warriors armed to the teeth, came more canoes of the
war. Behind them were more,—and more,—and still more.
"Come, come, you sniveling parson," Gleazen bellowed, "where are
your guns? Where's your powder? Come, arm yourself!"
The man turned on him with a look of scorn that no words of mine
can properly describe.
"You have brought your dirty quarrel to my door," he said in a grim,
hard voice. "Now do you wish me to fight your battles for you?"
Steadily, silently, the canoes were swinging inshore. I saw negroes
running into the clearing. On my left I heard a cry so shrill and full of
woe that it stood out, even amid the ungodly clamor of the blacks,
and commanded my attention.
The man stepped down from the porch.
"This," he said, turning, "is a house of peace. I order you to leave it.
I will go down and talk with these men myself."
"You'll never come back alive!" Matterson cried, and hoarsely
laughed.
At that the missionary, John Parmenter, merely smiled, and, afraid of
neither man nor devil, walked down toward the river and fell dead
with a chance arrow through his heart.
There was something truly magnificent in his cold courage, and
Gleazen paid him almost involuntary tribute by crying, "There, by
heaven, went a brave man!"
But from the door of the house the girl suddenly ran out. Her face
was deathly white and her voice shook, but as yet there were no
tears in her eyes.
"Father!" she cried, and ran down the path, where occasional arrows
still fell, and bent over the dead man.
"Come up, you little fool," Gleazen shouted. "Come back!" Then he
jumped and swore, as an arrow with a longer flight than its fellows
passed above his head.
The canoes were drawing in upon the shore, very cautiously,
deliberately, grimly, in a great half-moon, and more of them were
arriving at every moment.
I leaped from the porch and sped down beside the girl.
"Come," I cried, "you—we—can do nothing for him."
"Is it you?" she said. "You—I—go back!"
"Come," I cried hoarsely.
"Don't leave him here."
I bent over and lifted the body, and staggering under its weight,
carried it up into the house and laid it on the couch in the big front
room.
All this time the noise within and without the mission was deafening.
The blacks on the river were howling with fury, and those ashore,
who had not already fled to the woods, were wailing in grief and
terror. Gleazen and Arnold Lamont had joined forces to organize a
defense, the one raving at the arrant cowards who were fleeing from
first sight of an enemy, while the other turned the place upside
down in search of arms. And still the blacks on the river held off,
probably for fear of firearms, though there were indications that as
their numbers grew, they were screwing up their courage to decisive
action.
The girl, suddenly realizing the object of Arnold's search, said
quietly, "There are no weapons."
Arnold threw his hands out in a gesture of despair.
"If you wish to leave," she coldly said, "there is a boat half a mile
downstream. You can reach it by the path that leads from the
chapel. No one will notice you if you hurry."
"Then," I cried, "we'll go and you shall come with us."
Gleazen spoke to the trader in Spanish.
Abe Guptil was beside me now and Arnold behind me. We three,
come what would, were united.
A louder yell than any before attracted our attention, and Matterson,
who stood where he could see out of the window, called, "They're
coming! Run, Neil, run!"
At that he turned and fled, with the others after him.
I stopped and looked into the girl's gray eyes.
"Come!" I cried, "in heaven's name, make haste!"
I had clean forgotten that the dead man by whom the girl was
standing was her father; but her next words, which were spoken
from deepest despair, reminded me of it grimly.
"I will not leave him," she said.
"You must!"
"I cannot."
"What," said I, "would he himself have had you do?"
Her determination faltered.
"Come! You cannot do anything more for him! Come."
She shook her head.
"Then I shall stay," I said.
"No," said she, and I saw that there was a change in her manner
toward me. "You will go and I—I—"
Then she whistled and cried, "Paul! Paul!"
The great black Fantee servant whom I had seen with her in the
canoe on that day when first we met, appeared suddenly.
"Come," she said.
I now saw that Arnold Lamont was running back to the door of the
room.
"Quick!" he called. "Mon dieu, be quick!"
He stepped aside and let her go through the door first.

CHAPTER XXIX
THE FIGHT AT THE LANDING

As we ran down the footpath, we heard them after us like hounds on

the trail, and I tell you, it galled me to run from that cowardly pack.
Oh, for one good fight, I thought! For a chance to avenge Seth
Upham, who lay miles away beside the spring at the king's grave, to
avenge the stern man who had fallen so bravely in front of the
mission! For a chance to show the black curs that we would and
could meet them, though the odds against us were a hundred to
one! A chance to hold our own with them in defiance of their arms
and numbers!
The hot pride of youth burned in my cheeks, and I was actually
tempted to turn on them there and then; but now I thought of
something besides myself, of something besides Seth Upham's rights
and my own: I thought of the girl who ran ahead of me so lithely
and easily. Be the hazards what they might, be the shame of our
retreat ever so great, she must not, while one of us lived, be left to
that herd at our heels.
So, running thus in headlong flight, out we came on the river bank.
There was a boat on the river, made fast to a peg on the bank, and
there was a long canoe drawn up in the bushes. But at a great
distance, where a narrow channel led through the mangroves, we
saw titanic waves rolling on the bar in shining cascades from which
the sun was brightly reflected, and which, one after another, hurled
ton upon ton of water into a welter of foaming whirlpools. And over
the lifting crests of the surf we saw, standing offshore, the topsails
of a brig. The prospect of riding that surf in any boat ever built gave
me, I confess without shame, a miserably sick feeling; and as if that
were not enough, in through the mangroves to the shore in front of
us shot three canoes of the war, and cut us off from the river.
Our time now had come to fight. With blacks behind us and blacks
before us, we could no longer double and turn. The river, we knew,
was alive with the canoes of the war. Already the black hornets were
swarming through the woods and swamps around us. Three times
now we had eluded them; this time we must fight. Our guns were
lost and only pistols were left. No longer, as in that fatal hut on the
king's grave,—in my heart I cursed the bull-headed stupidity of the
man who built it and who had paid but a fraction of the price with
his own life!—could we hold them at a distance by fear of firearms.
Their frenzy by now brooked no such fear. To the brig, whose
topsails we could descry miles off shore, we must win our way; there
lay our only hope.
I thought of the voice of the wizard—"White man him go Dead
Land." Verily to the door of his Dead Land we had come; and it
seemed now that we must surely follow Bull and Seth Upham and
Bud O'Hara and many another over the threshold.
"Men," said Arnold Lamont,—and his voice, calm, precise, cutting,
brought us together,—"stones and clubs are not weapons to be
despised in an encounter hand to hand."
"Have into 'em, then!" Gleazen gasped. "All hands together!"
"Mademoiselle," said Arnold, "keep close at our heels."
The girl was beside me now. Her eyes were wide, but her lips were
set with a courage that rose above fear. "Come," she cried, and set
my heart beating faster than ever, if it were possible, "they're upon
us from the rear!" Then she spoke to her great negro in a language
that I had never heard, and came close behind us when we charged
down on the blacks ahead.
I fired my pistol and saw that the ball accounted for one of our
enemies. I reeled from a glancing blow on the head, which knocked
me to my knees; but, rising, I lifted a great rock on the end of a
rope, which evidently the girl or her father had used for an anchor,—
never negro tied that knot!—and swinging the huge weapon round
my head, brought down one assailant with his shoulder and half his
ribs broken. Now Arnold fired his pistol; now Matterson pitched,
groaning, into the boat. Now, with my bare hand, I parried a spear-
thrust and, again swinging my rock, killed a negro in his tracks.
Out of the corner of my eye I saw that the girl had shoved the canoe
into the water. She was calling to us eagerly, but neither I nor the
others could distinguish her words.
As Gleazen, with an oath, cut the painter of the boat and leaped into
her, the impulse of his jump carried her ten feet out from shore; and
instantly thrusting out the oars, he started to row away with
Matterson and desert us.
"Come back, you yellow cur!" Arnold cried.
The trader, who had fought industriously but to no great purpose,
now ran down the bank and, flinging himself full length into the
river, caught the stern of the boat, with outstretched fingers, and
dragged himself into her, and at the same moment Abe Guptil,
obviously with the intention of holding the boat until the rest of us
should have a chance to embark, too, not of saving himself, fought
his own way aboard and, in spite of violent efforts to lay hands on
the oars, was carried, protesting, away.
It is not to be thought that Gleazen had the remotest notion of
saving our lives. Having got rid of Arnold and me, he could, as he
very well knew, do what he pleased with the brig when once he had
silenced Gideon North. But although he had every desire not to help
us, he in truth did help us in very spite of himself: no sooner did he
appear to be getting safely out into the river, than the blacks, who
had us all but at their mercy, suddenly bent every effort to keep him,
too, from escaping.
"Let them go! Let them go! Oh, will you not come this way?"
It was the girl again. There was not a drop of cowardly blood in her
veins. She, in the bow of the canoe and her big black servant in the
stern, held the craft against the bank.
Taking advantage of the momentary respite that we got while the
enemy was putting after Gleazen, Arnold and I fairly trembling in our
haste—Arnold missed his footing and plunged waist-deep into the
river—climbed in after them.
All this, which has taken a long time to tell, happened like so many
cracks of the whip. Each event leaped sharply and suddenly at the
heels of another, so that it was really but a few seconds—at all
events less than a minute—after our arrival at the shore when we
found ourselves gliding swiftly and noiselessly through a tiny channel
among the mangroves, of which Gleazen had never dreamed. A turn
of the paddle carried us out of sight of the struggle behind us, and it
now appeared that, once out of sight, we were likewise out of mind.
"Mademoiselle," said Arnold, with a manner at once so deferential
and in itself so proud, that it puzzled me more than a little, "shall we
not paddle? Permit me to take your place."
"Thank you, no," she said.
"It is not fitting—" he began.
"I know the canoe, the river and the surf," she said. "It is safer that
I keep the paddle."
And to my surprise, as well as Arnold's, she did keep it and handled
it in a way that would have shamed our efforts had we been
permitted to try. It was a strange thing in those days, when most
women laced tightly, and fainted gracefully if ever occasion required,
and played at croquet and battledore and shuttlecock, to see a
slender girl swing a paddle with far more than a man's deftness and
skill to make up for what she lacked of a man's strength. But though
she appeared so slender, so frail, there was that in her bearing which
told us that her life in that wild place had given her muscles of steel.
The big Fantee, too, drove the long craft ahead with sure, powerful
strokes; so we shot out of the mangroves, out of the mouth of the
river, into the full glare of the sun.
For a time the sails of the brig had grown small in the distance, but
already we saw that she had come about and was standing in again.
Why, I wondered, did Gideon North not anchor? Why should he
indefinitely stand off and on? How long had he been beating back
and forth, and how long would he continue to wait for us if we were
not to come? We were long overdue at the meeting-place.
"To think," I said, "that now we can go home to Topham!"
"To Topham?" said Arnold. There was a question in his voice. "I
should be surer of going home to Topham if we were rid of Gleazen.
Also, my friend, we must ride that surf to the open sea."
The negro in the stern of the canoe now spoke up in gutturals.
"See!" Arnold cried.
Looking back up the river, we saw Gleazen and Abe Guptil, whom we
had outdistanced by our short cut, now rowing madly downstream.
Big and heavy though the boat was, they rowed with the strength
that precedes despair, and sent her ploughing through the river with
a wake such as a cutter might have left. In the stern beside the
trader lay Matterson; and though his face, we could see, was
streaked with blood, he menaced the negroes upstream with a
loaded pistol. Arrows flew, and then a long spear hurtled through
the air and struck the bow of the boat. But for all that, they bade
fair to get clean away, and none of them appeared aware that we
had slipped ahead of them in the race for life.
Now we in the canoe had come to the very edge of the surf, where
the surge of the breakers swept past us in waves of foam. Beyond
that surf was the open sea, the brig and safety. Behind it were more
terrors than we had yet endured. For a moment the canoe hung
motionless in the boiling surge; then, taking advantage of the
outward flow and guided and driven by the hands of the great negro
and the white, slender girl, she shot forward like a living creature,
rose on the moving wall of an incoming wave, yielded and for a brief
space drew back, then shot ahead once more and passed over the
crest just before the wave curled and broke.
I heard a cry from behind us and knew that the others had
discovered us ahead of them.
Turning, as we pitched on the heavy seas at a safe distance from the
breakers, I watched them, too, row into the surf. I faintly heard
Matterson's pistol spit, then I saw Gleazen drive the boat forward,
saw her hesitate and swing round, lose way and go over as the next
wave broke.
Then we saw them swimming and heard their cries.
As a mere matter of cold justice we should, I am convinced, have
left that villainous pair, Matterson and Gleazen, to their fate. They
had been ready enough to leave us to ours. Their whole career was
sown with fraud, cruelty, brazen effrontery, and downright
dishonesty. But even Arnold and I could scarcely have borne to do
that, for the trader was guiltless enough according to his lights, and
Abe Guptil was struggling with them in the water.
The girl, turning and looking back when she heard their shouts,
spoke to the great negro in his own language. The canoe came
about. Again we paused, waiting for a lull. Then we shot back on the
crest of a wave, back down upon the overturned boat, and within
gunshot of the flotilla of canoes that were spreading to receive us.
As we passed the wallowing boat I leaned out and caught Gleazen's
hands and drew him up to the canoe. The negro cried a hoarse
warning, and the canoe herself almost went over; but by as clever
use of paddles as ever man achieved, the girl and the negro brought
us up on an even keel, and Arnold and I lifted Gleazen aboard, half
drowned, and gave a hand to Abe Guptil, who had made out to
swim to the canoe. Of Matterson and the trader we saw no sign.
Then Abe, himself but newly rescued, gave a lurch to starboard, and
with a clutch at something just under water, was whipped, fiercely
struggling to prevent it, clean overboard.
We could neither stop nor turn; either would have been suicide.
Would we or would we not, we went past him and left him, and
drove on in the wash of the breaking waves down upon the grim line
of canoes.
To them we must have seemed a visitation. When I sit alone in the
dark I can see again in memory, very clearly, that white girl, her
eyes flashing, that great, black Fantee, his bared teeth thrust out
between his thick lips. The long breakers were roaring as they swept
across the bar and crashed at slow intervals behind us. In those
seething waters the fiercest attack would have been futile; the very
tigers of the sea must have lain just beyond the wash of the surf, as
did the war. To one who has never seen a Fantee on his native coast,
the story that I tell of that wild canoe-ride may seem incredible. It
was an appalling, horrifying thing to those of us who were forced
passively to endure it, who a dozen times were flung to the very
brink of death. And yet every word is true. Though I could scarce
draw breath, so swiftly did we escape one danger only to meet
another, the big black, trained from childhood to face every peril of
the coast, with the white girl paddling in the bow, brought the canoe
through the surf and shipped no more than a bucket of water. And
then that negro and that slim girl turned in the surge, as coolly as if
there were no enemy within a thousand miles, and started back, out
again through the surf, to the Adventure.
Were we thus, I thought, to lose Abe Guptil, whom but now we had
rescued—good old Abe Guptil, into whose home I had gone long
since with the sad news that had forced him to embark with us on
Gleazen's mad quest? The thunder of the seas was so loud that I
could only wait—no words that I might utter could be heard a
hand's-breadth away.
For a moment the canoe hung motionless on the racing waters as a
hummingbird hangs in the air, then she shot ahead; and up from the
sea, directly in her path, came a tangle of bodies. Leaning out,
Arnold and I laid hands on Abe and Matterson; and while the negro
held the canoe in place, the girl herself reached back and caught
that rascal of a trader by the hair. Now tons of water broke around
us and the canoe half filled. Now the big negro, by the might of his
single paddle, drove us forward. The wash of water caught us up
and carried us on half a cable's length; the negro again fairly lifted
us by his great strength; we went in safety over the crest of the next
wave, then as we drew the last of the three into the canoe, we
began to pitch in the heavy swell of the open sea.
With our backs turned forever on the war, we paddled out to meet
the brig. Our great quest had failed. We had left a trail of dead men,
plundered goods, and a broken mission. But though all our hopes
had gone wrong, though Gleazen had lost all that he sought, there
was that in his face as he lay sick and miserable in the canoe which
told me that he had other strings for his bow; and when I looked up
at the brig, I vowed to myself that I would defend my own property
with as much zeal as I would have defended my uncle's.
"See!" Arnold whispered. "Yonder is a strange ship!"
I saw the sail, but I thought little of it at the time. I had grown
surprisingly in many ways, but to this very day I have not acquired
Arnold Lamont's wonderful power to appraise seemingly insignificant
events at their true value.
I only thought of how glad I was to come at last to the shelter of the
brig Adventure, how strangely glad I was to have brought off the girl
from the mission.
And when we came up under the side of the brig and saw honest
Gideon North and all the others on deck looking down at us, the girl
let her paddle slide into the water and bent her head on her hands
and cried.
 VII
THE LONG ROAD HOME
 CHAPTER XXX
THE CRUISER

Matterson, Gleazen and the trader, Arnold, Abe and I, and the white
girl and her great black servant, all were crowded into a frail dugout,
which must long since have foundered, but for the marvelous skill of
the big Fantee canoeman and the sureness and steadiness with
which the girl had wielded her paddle. And now the girl sat with her
face buried in her hands and her shoulders shaking as she sobbed;
and the big black, awed and frightened by the nearness and
strangeness of the good Adventure, was looking up at the men who
had crowded to the rail above him. As the brig came into the wind
and lay beside the canoe, her yards sharply counter-braced, the long
seas rose to the gunwale of our heavily laden and waterlogged little
craft, and she slowly filled and settled.
We should have perished there and then, within an arm's length of
the solid planks that promised safety, had not Gideon North acted
promptly. As the canoe settled and the water rose, I suddenly found
myself swimming, and gave the bottom of the canoe a kick and
plunged forward through the water to reach the girl and hold her up.
At the same moment, indistinctly through the rush of the waves, I
heard Captain North giving orders. Then I saw Abe beside me,
swimming on the same errand, and heard someone spluttering and
choking behind me; then I came up beside the girl and, seizing one
slender wrist, drew her arm over my shoulder and swam slowly by
the brig.
There was no excitement or clamor. The canoe, having emerged half
full of water from those vast breakers on the bar, yet having made
out to ride the seas well enough until the girl and the negro stopped
paddling, had then quietly submerged and left us all at once
struggling in the ocean.
Blocks creaked above us and oars splashed, and suddenly I felt the
girl lifted from my shoulders; then I myself was dragged into a boat.
Thus, after ten days on the continent of Africa, ten such days of
suffering and danger that they were to live always as terrible
nightmares in the memory of those of us who survived them, we
came home to the swift vessel that had belonged to poor Seth
Upham.
To the story that we told, first one talking, then another, all of us
excited and all of us, except Arnold Lamont, who never lost his calm
precision and the girl who did not speak at all, fairly incoherent with
emotion, Gideon North replied scarcely a word.
"The black beasts!" Gleazen cried in a voice that shook with rage.
"I'd give my last chance of salvation to send a broadside among
them yonder."
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