A similar approach is used by Bhalotra and Cochrane 2010 for example Results

A similar approach is used by bhalotra and cochrane

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them with my ecological diversity measure. A similar approach is used by Bhalotra and Cochrane (2010), for example. Results are reported in Table 10. I find that, while some of these interactions are significant, they do little to diminish the main result, suggesting that it cannot be explained away by heterogeneous treatment effects once controls are added. Second, I employ a nearest neighbor matching estimator in order to shift the bulk of identifying variation to those observations that are most similar along their observ- ables. 14 Because these estimators consider a binary “treatment,” I divide the sample into observations above and below the median in ecological diversity. Results are given in Table 10. The main results look qualitatively similar using this measure of ecological diversity. If observations are matched using their observable controls (column 4), the difference in state centralization between “treated” and “untreated” societies (the aver- age treatment effect) remains statistically significant and is similar in magnitude to the comparable regression in column 2. Third, I compute Altonji-Elder-Taber statistics. Replicating the main regression us- ing OLS, I obtain the estimated coefficient on ecological diversity ˆ β 1 and the estimated variance of the residuals ˆ V 1 . Regressing state centralization on the controls, I obtain 13 In particular, I use the spatwmat and spatreg commands in Stata. 14 In particular, I use the nnmatch command in Stata.
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18 JAMES FENSKE F IGURE 7. Ecological diversity and state centralization for artificial coun- tries Source: Murdock (1967) and White (1983). In the left-hand map of ecological diversity, darker regions are more diverse. In the right-hand map of state centralization, darker regions are more centralized. the predicted values xb and the estimated variance of the residuals ˆ V 2 . Regressing eco- logical diversity on xb , I obtain the coefficient estimate ˆ β 2 . Altonji et al. (2005) suggest that if ˆ β 1 ˆ V 2 ˆ β 2 ˆ V 1 > 1 , it is unlikely that unobservables will explain away the result of interest. The estimates reported, 4.51 if fixed effects are not included and 3.08 if they are, do not support selection on the unobservables. 5. A LTERNATIVE STORIES The results presented so far are not, however, completely dispositive. They are consis- tent with at least five alternative stories of the relationship between ecology, trade and states in pre-colonial Africa. In the remainder of this section, I give evidence that the Ricardian view of African states better fits the data. 5.1. Larger areas are more diverse and require more centralized administration. It is possible that, if administering a larger area requires more levels of administration, states that happen to cover greater territories for reasons unrelated to their strength will appear more centralized in the data. Further, larger areas may be mechanically more likely to be ecologically diverse. Conversely, there is the “territorial expansion model” of Spencer (1998, 2010), who argues that the delegation of administrative authority to regional units is a ruler’s rational response to territorial expansion. Again, this could
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