Hither Thou Shalt Come, But No Further: Reply to "The Colonial Origins of Comparative Development: An Empirical Investigation: Comment"
David Albouy expresses three main concerns about the results in Acemoglu, Johnson and Robinson (2001) on the relationship between potential settler mortality and institutions. First, there is a general concern that there are high mortality outliers, potentially affecting this relationship, with which we agree. However, limiting the effect of outliers has no impact on our substantive results and if anything significantly strengthens them, in fact making them robust to even extreme versions of his other critiques. His second argument that all the data from Latin America and much of the data from Africa, making up almost 60% of our sample, should be dropped is arbitrary - there is a great deal of well-documented comparable information on the mortality of Europeans in those places during the relevant period. His third argument that a "campaign" dummy should be included in the first stage is at odds with the historical record and is implemented inconsistently; even modest corrections undermine his claims.
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