POLS0012: Causal Analysis in Data Science - Long-Term Impact of the Slave Trade - Statistics Assignment Help

Assignment Task:

QUESTION 1: The Long-Term Impact of the Slave Trade [30 Points] 

This part uses data from the following paper, available in the ‘Essay’ folder on Moodle: 

Nathan Nunn (2008). “The Long-Term Effects of Africa’s Slave Trades.” Quarterly Journal of Economics 123 (1): 139-176. 

To help answer this question, first read the paper. Part of your task is to replicate and extend some of Nunn’s results, which he produces using instrumental variables. If you are unable to exactly reproduce Nunn’s results, report your best effort to do so. Whether or not you can exactly replicate the paper’s findings, ensure that both your write-up and your R script clearly indicate how you obtained your results. The dataset for this question is nunn.Rda. It contains these variables: 

Variable name Variable description country Country name ln_realgdp2000 Log real per capita GDP in 2000, also called “ln y” in the paper ln_export_area Log total number of slaves exported, divided by land area atlantic_dist Sailing distance to nearest destination of Atlantic slave trade indian_dist Sailing distance to nearest destination of Indian slave trade saharan_dist Overland distance to nearest port of export for Saharan slave trade redsea_dist Overland distance to nearest port of export for Red Sea slave trade colonial_power Name of colonizer, if any, prior to independence equator_dist Distance from equator longitude Longitude rain_min Minimum monthly rainfall humid_max Average maximum humidity low_temp Average minimum temperature ln_coastline_area Log coastline divided by land area low_distance =1 if situated at a low distance from a major slave destination high_slavery =1 if country had a high level of slave exports

Answer the following questions: 

a) [7 points] Begin by examining the relevance of Nunn’s instruments: 

i. Replicate the first stage results from the first column o

f Table IV on p.162. Report how you estimated them, and your results Note: You only need to produce the four coefficients and four standard errors ii. Conduct a statistical test to replicate the reported F statistic of 4.55 for these first-stage results, shown in Table IV

iii. Using the results from (i) and (ii), how relevant do you think that the instruments are? Explain your answer 

b) [5 points] Do you think that the instruments can be considered to be as-if randomly assigned? Explain your answer 

c) [6 points] Replicate the second-stage coefficients and standard errors for ln(exports/area) in columns (1), (2) and (3) of Table IV on p.162. Report how you estimated them, and your results. Note: You only need to produce the three coefficients and three standard errors. 

d) [2 points] Why do you think that Nunn estimated the additional models in columns (2) and (3) of Table IV that include colonizer fixed effects and geographic controls? 

e) [10 points] Now, you will re-do Nunn’s analysis of the impact of slavery on GDP with the Wald Estimator and binary variables. Use the single binary instrumental variable low_distance, the binary treatment variable high_slavery, and the outcome variable ln_realgdp2000.

i. Explain, in this case, what type of country is a complier and what type of country is an always-taker

ii. Calculate and report the proportion of compliers and the intent-to-treat effect

iii. Use your answers from (ii) to calculate and report the Complier Average Causal Effect (CACE) of high slavery on GDP.

iv. Using an appropriate method, calculate and report the p-value for this CACE estimate.

v. What do these results suggest about the relationship between slave exports and GDP?

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