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ECONOMETRIC MODELS
WITH PANEL DATA.
APPLICATIONS WITH STATA

César Pérez López

Table of Contents
Models WITH PANEL data

1.1 Introduction TO PANEL data: Data structures

1.1.1 Cross-sectional data

1.1.2 Time series data

1.1.3 Combinations of cross sections
1.1.4 Panel data or longitudinal data
1.2 ECONOMETRIC Models with PANEL data

1.3 Panel DATA Models with constant coefficients

1.4 Panel DATA Models WITH Fixed effects

1.5 PANEL DATA Models WITH Random effects

1.6 DYNAMIC PANEL data Models
1.7 LOGIT and PROBIT PANEL DATA Models

PANEL data models with STATA

2.1 Stata And PANEL data models

2.1.1 Random effects model

2.1.2 Model estimated using the between regression

estimator
2.1.3 Fixed effects model

2.1.4 Random effects by maximum likelihood model

2.1.5 Model in population mean

2.2 Examples MODELS with PANEL data

2.3 Logit, probit and Poisson models with panel data

2.4 Estimation of dynamic panels using the Arellano - Bond

methodology

LINEAR REGRESSION ESTIMATORS IN PANEL DATA

MODELS
3.1 STATA COMMANDS IN PANEL DATA MODELS LINEAR

REGRESSION

3.2 FIXED AN RANDOM EFFECTS, AND POPULATION-

AVERAGED EFECTS LINEAR MODELS. XTREG

3.2.1 Methodological notes

3.2.2 Betwenn-effects model

3.2.3 Fixed-effects model

3.2.4 Random-effects model

3.2.5 Random-effects model using ML

3.2.6 Population-averaged models

3.2.7 Fixed-effects models with robust standard errors

3.2.8 Fixed-effects model with robust standard errors.

Breus and Pagan test

3.2.9 Hausman especification test

3.3 PANELS WITH AUTOCORRELATION. XTREGAR

3.3.1 Fixed effects model

3.3.2 Fixed effects model: Baltagi-Wu LBI test

3.3.3 Random effects model

3.4 HETEROSKEDASTICITY AN AUTOCORRELATION IN

PANEL DATA MODELS. XTGLS

3.4.1 Heteroskedasticity in panels. XTGLS

3.4.2 Crosssectional correlation in panels. XTGLS

3.4.3 Autocorrelation within panels. XTGLS

3.5 PANEL-CORRECTED STANDARD ERRORS. XTPCSE

3.6 INSTRUMENTAL VARIABLES AND TWO-STAGE LEAST

SQUARES IN PANEL DATA. XTIVREG

3.6.1 Fixed effects model. XTIVREG

3.6.2 GLS randon effects model. XTIVREG

3.7 panel-data models with random coefficients. XTRC

3.8 panel-data models with multilevel mixed effects.

XTMIXED

3.8.1 Two level models, XTMIXED

3.8.2 Covariance estructures. XTMIXED

3.8.3 Likelihood versus restricted likelihood. XTMIXED

3.8.4 Three level models. XTMIXED

3.8.5 Blocked diagonal covariance estructures. XTMIXED

3.8.6 Heteroskedastic random effects. XTMIXED

3.8.7 Heteroskedastic residual errors. XTMIXED

3.9 ERROR-COMPONENTS MODEL across Hausman–Taylor

estimator . XTHTAYLOR
3.10 Stochastic frontier models for panel data.

XTFRONTIER
3.10.1 Timeinvariant Model. XTFRONTIER
3.10.2 Timevarying decay model. XTFRONTIER

DYNAMIC PANEL DATA Models

4.1 ESTIMATORS FOR DYNAMIC PANEL DATA MODELS

4.2 ARELLANO-BOND LINEAR DYNAMIC PANEL DATA.

XTABOND COMMAND
4.3 LINEAR DYNAMIC PANEL-DATA ESTIMATION. XTPD

4.4 ARELLANO–BOVER/BLUNDELL–BOND LINEAR DYNAMIC

PANEL-DATA ESTIMATION. XTDPDSYS

LOGIT AND PROBIT PANEL DATA Models

5.1 METHODOLOGICAL NOTES

5.2 STATA COMMAnds FOR ESTIMATE LOGIT AND PROBIT

PANEL DATA MODELS
5.3 Fixed-effects, random-effects, and population-averaged
logit models. XTLOGIT

5.4 Random-effects and population-averaged probit models.

Xtprobit

5.5 Random-effects and population-averaged cloglog

models. xtcloglog:

5.6 Multilevel mixed-effects logistic regression. Xtmelogit

5.6.1 Two-level models
5.6.2 Three-level models

5.6.3 Crossed-effects models

CENSORED AND COUNT Panel DATA MODELS. TOBIT,

POISSON AND NEGATIVE BINOMIAL MODELS

6.1 CENSORED AND COUNT PANEL DATA MODELS

6.2 CENSORED PANEL DATA MODELS

6.2.1 Tobit Random-effects tobit models: XTTOBIT
6.2.2 Random-effects interval-data regression models:

XTINTREG
6.3 COUNT PANEL DATA MODELS

6.3.1 Fixed-effects, random-effects, and population-

averaged Poisson models: XTPOISSON
6.3.2 Fixed-effects, random-effects, and population-

averaged Negative Binomial models: XTNBREG

Models WITH PANEL data

The data panels are a special type of samples in which the behavior of a
certain number of economic agents is followed over time. In this way, the
researcher can perform economic analysis and specify models with the
data of cross section that are obtained when all operators are considered
in an instant of time. Different patterns of behaviour of all agents together
studied in the different temporal moments may thus be assessed.
Alternatively, you can perform the same analysis considering time series
given by the evolution of each economic agent throughout all the periods
of the sample.

Therefore, an essential feature of the structure of panel data is its two-

dimensionality. The list of individuals (or economic agents) constitutes a
dimension and form another dimension the instants of time. Consider as
an example the case of the panel of the income tax of the people physical
(income tax panel) which develops the Institute of Fiscal Studies Spanish
and which aims to have a database with the statements of the tax on the
income of the same individuals every year. Different individuals are
income tax payers and the time interval varies at present between 1999
and 2012.

In them paragraphs following is delves a little more in the structures of

data immersed in the two dimensions of a set of data of panel. On the
one hand the data of cutting cross or section Cross and on the other hand
them data of series temporary.

Within the structures of data more important, typical in the work in

economy applied, have the cross-sectional data. A set of data of cross-
section is a sample composed by individuals, families, companies, cities,
States, countries u another type of units very varied collection in a time
certain of the time. General can assume that the data of cross-section is
have retrieved through a sampling random of the population underlying.
For example, if we get information about wages, education, experience
and other characteristics by choosing random 500 people of the employed
population, we can say that we have a random samples of the population
that has a job.
In the case of income from income tax panel, we consider all the variables
included in the model of tax and will be analysed for a given year.
Considering the different years have all cross sections every year.

The cross-sectional data are very often used in economics and other
social sciences. In economics, the analysis of cross-sectional data is
closely related to various branches of the applied microeconomics, as tax
analysis, the economics of labour, both State and local public finance
industrial organization, the urban economy, demography and health
economics. Data on individuals, families, companies and cities at a given
moment of time are important to compare micro-economic hypotheses
and assess economic and fiscal policies.

A time series data set consists of observations on a variable or variables

over time. Typical examples of time series data are gross domestic
product, the money supply, consumer price indexes, annual rates of
homicide or car sales figures.

Time series data are more used in macroeconomic analysis, as opposed to

the cross-sectional data, which are used mostly in microeconomic
analysis. Time series tend to be more difficult to analyze than the cross-
sectional data since we can almost never assume that economic
observations are temporarily independent.

In the case of samples of income tax we can consider time series

measuring the evolution of each variable of the tax over the period 1999-
2012.

A combination of cross sections or data pool is a fusion of several cross-

sections of data collected at different points in time in the same
population (but not for the same individuals). For example, suppose that
two surveys of cross section on families in a country, one in 1985 and
another in 1990 are. In 1985, a survey with a random sample is made to
obtain variables such as the level of income, savings, the size of families,
etc. In 1990, a new random sample of families is made and the same
questions that in 1985 to do the survey are used. In order to increase the
size of the sample, we can form a set of fused data of cross section by
combining data from two years. The fusion of different years often cross-
sectional data is useful to analyze the effects of government policies. The
idea is to collect data from the years before and after a key political
change.

Usually, fused cross-sectional data are analyzed very similar to

conventional cross-sectional data, except that we often need to take into
account differences in variables over time. In fact, in addition to
increasing the size of the sample, the cross section data fusion aims often
observe also how a key relationship has changed over time. However, by
combining cross sections obtained by random sampling from the same
population at different moments of time, we will have a sample of
observations distributed independently but not identically.

In the case of income tax could form a data pool joining all samples
selected annually. Obviously IRPF samples randomly selected each year
do not correspond to the same individuals.

A set of panel data, or longitudinal data, consists of a time series for each
unit of a cross section (or set of cross-sectional data). A panel of data is a
fusion of several cross-sections of data collected at different points in time
(or in different geographical units or for different companies, etc.) in the
same town for the same individuals.

As an example, suppose that we have a record of data on wages,

education, and the employment history of a set of individuals followed for
a period of ten years. Also could collect information on them data
financial or of investment of a same set of companies during a period of
five years (therefore those individuals not have why be people). Panel
data can also be collected about geographic units. For example, we may
collect data on flows of immigration, level of taxation, wages, cost of
Government, etc., in the same set of countries of the European Union for
the years 1990, 1995 and 2000. The key feature of the panel data, which
differentiates them from the fused data of cross section, is the fact that is
collected information of the same cross section (individuals, companies,
countries, etc) units in the different moments of time.

But we must not forget that the essential characteristic of a panel is its
temporal dimension, given that is formed with observations on great
variety of individuals taken at different moments of time, usually years.
However, made differentiator of a panel is that usually the observations
come from the same individuals at different moments in time . In
addition, when the source of information that feeds the panel are
administrative records there is virtually no response, which allows to form
compact panels ideal for exempt of missing values and atypical data
analysis without the application of methods of imputation of missing
information be required. The stage of exploratory data analysis, prior to
any application with panel data and decisive results, looks like this
strongly favoured.

The double dimensionality of a panel leads us to consider the regression

model with panel data as a set of models for each value of the temporary
variable. Note that what we call here a temporary variable can be any
other variable that classify individuals in various significant groups, for
example geographical regions, companies, etc. However, for simplicity we
will continue referring to this second dimension of the panel as a temporal
dimension.

Consider that we start from the regression model that has as the
dependent variable the variable and independent variables x 1 , x 2 ,…, x
k , given by the equation:

Given a set of N observations for each of the variables endogenous and

exogenous, we can write the model as follows:

i =1,…, N

Consider now the previous model for each temporary unit where t =1,
2,3,…, T . This model, called panel data model, can be written as follows:

or in closed notation:

where i = 1,…, N sample observations and t = 1,…, T temporary

moments. It is that u it are the terms of error at each time instant. We
have 0 , 1 , 2 ,…, k are the parameters that we want to estimate.

If we consider a model of panel data as a usual regression with NxT

model observations, we must demand the following typical conditions for
all regression model:

E [ u it ] = 0 for all t or temporary moment.

Var [ u it ] = ² for all temporary moment t ( homoscedasticity )

Cov [ u it , u js ] = 0 for all observation i j and for all temporary instant t s

( no autocorrelation )

Cov [ u it , kit X ] = 0 for all i and t ( no endogeneity )

u it follows a normal distribution with mean 0 and Var [ u it ] = ²

The estimation of this model of panel data as usual regression using

ordinary least squares leads to obtain estimates of the coefficients which
are the same for each of the temporary moments in the sample. In this
case we must especially watch of heteroscedasticity (typical problems
when there is a large set of data for the estimation of the model) and
autocorrelation (typical when there are long time series). We should not
forget the residual normal (more difficult to meet by having more
observacones) and non-multicolinearity. It is not usual to panel data
models are treated as constant coefficient models).

Consider the following general panel data model:

where i = 1,…, N sample observations and t = 1,…, T temporary

moments.

Let’s assume that this model errors can decompose in a component i

relative to the sample observations or individuals independent of the time,
a component t relative to the temporary moments of the independent
panel of individuals and a component it relative to the variation between
individuals and across the temporal moments. We can then write the
model of panel in the following manner:

When there are many sample observations (individuals) and few

temporary moments (geographical regions, companies, etc.) the variation
in the sample due to the T - 1 temporary moments is captured across
dichotomous variables d t associated with each of the temporary
moments (except one who was taken as a reference to prevent the
multicolinearity). The variable d 1 takes the value of 1 in the event that
observation relates to the temporary moment 1 and takes the value 0 for
the rest of time units. Similarly, when there are few sample observations
and many temporary moments, are capture the differences through the
various individuals of the sample including N -1 dichotomous variables e i
associated with each of the sample individuals (except one who was taken
as a reference to prevent the multicolinearity). These variables take the
value of 1 for a given individual, and 0 for the rest.

Panel data model is now as follows:

with:

and

In the case of fixed effects panel data, the final model to estimate by
minimum regular squares (MCO) is as follows:

Parameters p i will estimate the fixed effects relating to individuals or

sample observations and parameters q t will estimate the fixed effects
relative to each temporary moment considered in the panel. The model
can have one individual effect (FIXONE) only, or both (FIXTWO) effects
. The parameters β j estimate the coefficients of the model variables that
are common to individuals and the temporal moments.

In the random-effects model i or t varies randomly across individuals and

time. The model don’t have deterministic components. Its equation is still:

but now, the error u it has a single component random i which is

invariably through the temporary moments and that characterizes each of
the individuals. This component is called “inter-group” component .

At the same time, error u it has a temporal component random t which is

invariably through individuals and that characterizes each of the temporal
moments. This component is called “intragrupos” component .

Finally, the error u it also has a component it that is random across

individuals and across time.

In the random-effects model all the error components i , t , it are random

with zero mean normal distribution. Are also uncorrelated with itself (E ( i
j ) = 0 and E ( t s ) = 0 for every individual i j, and all temporary moment
t s), they have constant variance (homoscedasticity) and meet the
Other documents randomly have
different content
 IV.

INFORMATION FOR INTENDING

TOURISTS:
A LETTER RECEIVED FROM THE REV. OLAF PÁLSSON IN ANSWER TO
QUERIES ABOUT TRAVELLING IN ICELAND.

Reykjavik, 20th Nov. 1861.

My Dear Friend,
According to your wish in your kind note of 15th August this year,
I will now try to give some answers to the queries you have there put to me,
about several matters which it may be useful for strangers who travel in
Iceland to know.
I have since conferred with Zöga, who is assuredly the very best guide in this
place, and well versed in these matters. The hints that I am able to give are as
follows, and correspond to the order of the queries put.
1st. I have not such an extensive acquaintance with the coasts of Iceland as to
be able to describe all places of shelter that might be found around the island;
for doubtless they are many. But I am sure, that it will not be advisable for any
foreign vessel to approach the south coast; for, from Cape Reykjanes to
Berufiord, there is no shelter at all along the whole south side of Iceland,
except in the Westmanna Islands, which lie some ten miles from the shore.
As a general rule, every merchant place, marked on the map, will be found
tolerably safe.
2d. For the Englishman who arrives at Reykjavik, or for any traveller who has
some knowledge of English, it is not absolutely necessary to know other
languages; for guides who know that language can be had there, and these
make tolerably good interpreters in the country.
This, however, will scarcely be the case in any other merchant place in Iceland.
3d. As to expenses of travelling; I can only remark that a guide is paid about 2
rix dollars[54] a day (4/6).
Every gentleman will be obliged to have two ponies each at 64 skillings per day
(1/5). A jack horse is to be got at 48 skillings per day, and will not comfortably
carry more than 100 to 120 lbs. weight. If this horse is provided with pack
saddle and chests for preserving goods in, it will cost 64 skillings. If the
travellers should wish to be away for a longer time from human habitations, it
will be necessary for them to bring with them a tent, a sufficient quantity of
victuals, &c. Thus it will be found that two gentlemen travelling cannot easily
do with less than five pack horses, and then they will require to have two
guides, one to take care of the horses and baggage, and the other to attend
upon themselves when they wish to travel faster, or to visit places where the
train of baggage horses cannot easily go with them.
From this I hope an idea can be formed of the average cost of such travelling
for a week or so. For a more protracted journey through the island, it will
certainly be preferable to buy the horses, and dispose of them again by auction
on returning to Reykjavik. The average price of a pack horse will be 24 rix
dollars, and for a riding pony 30 to 40 rix dollars. They will again sell at a half,
or at least a third of the money, according to the length of the journey, their
condition, and the season of the year. This calculation is made for a journey
begun from Reykjavik, which in most respects will be found the most
convenient place to start from.
4th. An india-rubber boat will very probably be serviceable, but it will seldom
be needed; for on almost every one of the larger rivers there are plenty of
ferries.
5th. The very best month for travelling in Iceland undoubtedly is July, and next
to it August. A journey can be begun in the middle of June. At an earlier time
there will not be sufficient grass for the horses. The journey can usually,
without the risk of getting bad weather, be prolonged to the middle of
September.
These, my dear sir, are all the hints I am able to give you. I am sure there are
many other things which might be taken into consideration, but I have written
this to my best ability, although in great haste, which may excuse the many
faults I am sure will be found with my English. With my best wishes &c.
Yours very truly,
O. Pálsson.
Note.—The screw steamer Arcturus makes six trips during the season, carrying the mails
from Copenhagen to Iceland, and calling at Grangemouth and the Faröe Islands. The first
sailing north is generally about the beginning of March, and the last towards the end of
October. Fares—First cabin £5; second do. £3 10s. Return—only available for the same
voyage—first cabin £9; second do. £6. Further information may be obtained by applying to
Mr. P. L. Henderson, 20 Dixon Street, Glasgow; Messrs. David Robertson & Co.,
Grangemouth; or Messrs. Koch & Henderson, Copenhagen.
 V.

GLOSSARY.
The following Explanatory List of Geographical Terms will assist the memory,
aid the pronunciation, and, it is believed, prove of interest and practical utility.
[55]

á or aa, river.

bakki, hill.
beru, bare.
beru-fjördr, bare frith.
blá, blue.
bœr, farm.
bol, or bol-stadr, main farm, or steading (bu or boo, in Orkney).
brekka, brink of a precipice.
brú, bridge.

dalr, valley.

eingi, or hagi, meadow, or field.

ey (eyjar, genitive singular; eyja, genitive plural), an island
eyri, sand, sand-bank or bar (ere, in north of England)

fell, same as fjall.

ferjur, ferries.
fjall, (plural fjöll), fell, or height; as Blá-fjall, blue fell, or, in English, Scawfell, &c.
fjördr, frith.
fljót, a river (fleet)
fors, force, or waterfall.

hals, ridge, or col.

hædir, heights.
heidi, heath.
hof, or hofdi, head, or headland.
holl, hill.
holt, wood.
hraun, lava.
hreppr, a rape (whence divisions of land, and “rapes” of Sussex).
hvamm, a combe, or recess surrounded by hills; as Ilfra-combe.
hvit, white (hence hvit-á, white river.)

jökull, ice mountain.

jökuls-á, is the name given to many rivers, and means only ice river; but it is usually associated
with another name, such as Axa-firdi Jökuls-á, or ice river of the Axa frith.

kirk, church.
kverk, chin (hence Kverk-fjöll, Chinfell).

lid, lithe, provincial for a sloping bank (whence Reykja-lid, the smoking bank).
lœkr, brook, stream.

muli, mull, or cliff; thing-muli, the heights, or cliffs, under which an assembly was held.
myri, morass.

ness, headland.
nupr, bluff, or inland cliff.

orœfi, wastes.

rafn, raven.
reyk, smoke.

sandr, sands.
skard, pass, defile.
skógr, underwood.
stadr, stede, stead, or sted; as Hampstead.
strönd, strand.
sysla, or syssel, district.

thing, meeting.

vatn (plural, vötn), lake.

vellir, plain.
vik, vikr, bay; Grunda-vik, green bay; Greenwich = Green-vik.
 VI.

OUR SCANDINAVIAN ANCESTORS.[56]

Few subjects possess greater interest for the British race than the Scandinavian
North, with its iron-bound rampart of wave-lashed rocks, its deeply indented
fiords, bold cliffs, rocky promontories, abrupt headlands, wild skerries, crags,
rock-ledges, and caves, all alive with gulls, puffins and kittiwakes; and in short,
the general and striking picturesqueness of its scenery, to say nothing of the
higher human interest of its stirring history, and the rich treasures of its grand
old literature.
The British race has been called Anglo-Saxon; made up however, as it is, of
many elements—Ancient Briton, Roman, Anglo-Saxon, Dane, Norman, and
Scandinavian—the latter predominates so largely over the others as to prove
by evidence, external and internal, and not to be gainsaid, that the
Scandinavians are our true progenitors.
The Germans are a separate branch of the same great Gothic family,
industrious, but very unlike us in many respects. The degree of resemblance
and affinity may be settled by styling them honest but unenterprising inland
friends, whose ancestors and ours were first cousins upwards of a thousand
years ago.
To the old Northmen—hailing from the sea-board of Norway, Sweden, and
Denmark—may be traced the germs of all that is most characteristic of the
modern Briton, whether personal, social, or national. The configuration of the
land, and the numerous arms of the sea with which the north-west of Europe
is indented, necessitated boats and seamanship. From these coasts, the
Northmen—whether bent on piratical plundering expeditions, or peacefully
seeking refuge from tyrannical oppression at home—sallied forth in their frail
barks or skiffs, which could live in the wildest sea, visiting and settling in many
lands. We here mention, in geographical order, Normandy, England, Scotland,
Orkney, Shetland, Faröe, and Iceland. Wherever they have been, they have left
indelible traces behind them, these ever getting more numerous and distinct as
we go northwards.
Anglen, from which the word England is derived, still forms part of Holstein a
province in Denmark; and the preponderance of the direct Scandinavian
element in the language itself has been shewn by Dean Trench, who states,
that of a hundred English words, sixty come from the Scandinavian, thirty
from the Latin, five from the Greek, and five from other sources.
In Scotland many more Norse words, which sound quite foreign to an English
ear, yet linger amongst the common people; while, as in England, the original
Celtic inhabitants were driven to the west before the Northmen, who landed
for the most part on the east. In certain districts of the Orkneys a corrupt
dialect of Norse was spoken till recently, and the Scandinavian type of features
is there often to be met with.
The Norse language is still understood and frequently spoken in Shetland,
where the stalwart, manly forms of the fishermen, the characteristic prevalence
of blue eyes and light flaxen hair, the universal observance of the Norse Yule,
and many other old-world customs, together with the oriental and almost
affecting regard paid to the sacred rites of hospitality, on the part of the
islanders, all plainly tell their origin.
The language of the Faröe islanders is a dialect of the Norse, approaching
Danish, and peculiar to themselves. It is called Faröese. The peaceful
inhabitants not only resemble, but are Northmen.
In Iceland we have pure Norse, as imported from Norway in the ninth
century, the lone northern sea having guarded it, and many other interesting
features, from those modifications to which the Norwegian, Danish, and
Swedish have been subjected by neighbouring Teutonic or German influences.
This language, the parent, or at least the oldest and purest form of the various
Scandinavian dialects with which we are acquainted, has been at different times
named Dönsk-tunga, Norræna, or Norse, but latterly it has been simply called
Icelandic, because peculiar to that island.
The language, history, and literature of our ancestors having been thus
preserved in the north, we are thereby enabled to revisit the past, read it in the
light of the present, and make both subservient for good in the future.
Herodotus mentions that tin was procured from Britain. Strabo informs us
that the Phœnicians traded to our island, receiving tin and skins in exchange
for earthenware, salt, and vessels of brass; but our first authentic particulars
regarding the ancient Britons are derived from Julius Cæsar, whose landing on
the southern portion of our island, and hard-won battles, were but transient
and doubtful successes. The original inhabitants were Celts from France and
Spain; but, as we learn from him, these had long before been driven into the
interior and western portion of the island by Belgians, who crossed the sea,
made good their footing, settled on the east and south-eastern shores of
England, and were now known as Britons. With these Cæsar had to do. The
intrepid bravery of the well-trained and regularly disciplined British warriors
commanded respect, and left his soldiers but little to boast of. The Roman
legions never felt safe unless within their entrenchments, and, even there, were
sometimes surprised. Strange to realise such dire conflicts raging at the foot of
the Surrey hills, probably in the neighbourhood of Penge, Sydenham, and
Norwood, where the Crystal Palace now peacefully stands. Even in these dark
Druid days, the Britons, although clothed in skins, wearing long hair, and
stained blue with woad, were no mere painted savages as they have sometimes
been represented, but were in possession of regularly-constituted forms of
government. They had naval, military, agricultural and commercial resources to
depend upon, and were acquainted with many of the important arts of life.
The Briton was simple in his manners, frugal in his habits, and loved freedom
above all things. Had the brave Caswallon headed the men of Kent, in their
attack upon the Roman maritime camp, Cæsar and his hosts would never, in all
likelihood, have succeeded in reaching their ships, but would have found
graves on our shores. His admirable commentaries would not have seen the
light of day, and the whole current of Roman, nay, of the world’s history might
have been changed.
Our British institutions and national characteristics were not adopted from any
quarter, completely moulded and finished, as it were, but everywhere exhibit
the vitality of growth and progress, slow but sure. Each new element or useful
suggestion, from whatever source derived, has been tested and modified
before being allowed to take root and form part of the constitution. The
germs have been developed in our own soil.
Thus, to the Romans, we can trace our municipal institutions—subjection to a
central authority controlling the rights of individuals. To the Scandinavians, we
can as distinctly trace that principle of personal liberty which resists absolute
control, and sets limits—such as Magna Charta—to the undue exercise of
authority in governors.
These two opposite tendencies, when united, like the centripedal and
centrifugal forces, keep society revolving peacefully and securely in its orbit
around the sun of truth. When severed, tyranny, on the one hand, or
democratic license, on the other—both alike removed from freedom—must
result, sooner or later, in instability, confusion, and anarchy. France affords us
an example of the one, and America of the other. London is not Britain in the
sense that Paris is France; while Washington has degenerated into a mere
cockpit for North and South.
From the feudal system of the Normans, notwithstanding its abuses, we have
derived the safe tenure and transmission of land, with protection and security
for all kinds of property. British law has been the growth of a thousand years,
and has been held in so much respect that even our revolutions have been
legally conducted, and presided over by the staid majesty of justice. Were more
evidences wanting to show that the Scandinavian element is actually the
backbone of the British race—contributing its superiority, physical and moral,
its indomitable strength and energy of character—we would simply mention a
few traits of resemblance which incontestably prove that the “child is father to
the man.”
The old Scandinavian possessed an innate love of truth; much earnestness;
respect and honour for woman; love of personal freedom; reverence, up to the
light that was in him, for sacred things; great self-reliance, combined with
energy of will to dare and do; perseverance in overcoming obstacles, whether
by sea or land; much self-denial, and great powers of endurance under given
circumstances. These qualities, however, existed along with a pagan thirst for
war and contempt of death, which was courted on the battle-field that the
warrior might rise thence to Valhalla.
To illustrate the love of freedom, even in thought, which characterises the race,
it can be shewn that, while the Celtic nations fell an easy prey to the degrading
yoke of Romish superstition, spreading its deadly miasma from the south, the
Scandinavian nations, even when for a time acknowledging its sway, were never
bound hand and foot by it, but had minds of their own, and sooner or later
broke their fetters. In the truth-loving Scandinavian, Jesuitical Rome has
naturally ever met with its most determined antagonist; for
“True and tender is the North.”

In the dark days of the Stuarts, witness the noble struggles of the Covenanters
and the Puritans for civil and religious liberty.
Notwithstanding mixtures and amalgamations of blood, as a general rule the
distinctive tendencies of race survive, and, good or bad, as the case may be,
reappear in new and unexpected forms. Even habit becomes a second nature,
the traces of which, centuries with their changes cannot altogether obliterate.
On the other side of the Atlantic, the Puritan Fathers, their descendants, and
men like them, have been the salt of the north; while many of the planters of
the south, tainted with cavalier blood, continue to foster slavery—“that sum of
all villanies”—and glory in being man-stealers, man-sellers, and murderers,
although cursed of God, and execrated by all right thinking men. John Brown
of Harper’s Ferry, who was the other day judicially murdered, we would select
as an honoured type of the noble, manly, brave, truth-loving, God-fearing
Scandinavian—The Times and Athenæum notwithstanding.[57] His heroism in
behalf of the poor despised slave had true moral grandeur in it—it was
sublime. America cannot match it. Washington was great—John Brown was
greater. Washington resisted the imposition of unjust taxes on himself and his
equals, but was a slave-holder; John Brown unselfishly devoted his energies—
nay, life itself—to obtain freedom for the oppressed, and to save his country
from just impending judgments. The one was a patriot; the other was a patriot
and philanthropist. The patriotism of Washington was limited by colour; that
of Brown was thorough, and recognised the sacred rights of man. He was
hanged for trying to accomplish that which his murderers ought to have done
—nay, deserved to be hanged for not doing—hanged for that which they shall
yet do, if not first overtaken and whelmed in just and condign vengeance; for
the cry of blood ascends. He was no less a martyr to the cause of freedom
than John Brown of Priesthill, who was ruthlessly shot by the bloody
Claverhouse. These two noble martyrs, in virtue alike of their name and cause,
shall stand together on the page of future history, when their cruel murderers
and the abettors of them have long gone to their own place. For such deeds
there shall yet be tears of blood. The wrongs of Italy are not to be named in
comparison with those of the slave. Let those who boast of a single drop of
Scandinavian blood in their veins no longer withhold just rights from the
oppressed—rights which, if not yielded at this the eleventh hour, shall be
righteously, though fearfully, wrested from the oppressors, when the hour of
retribution comes.[58]
Perhaps the two most striking outward resemblances between Britons and
Scandinavians may be found in their maritime skill, and in their powers of
planting colonies, and governing themselves by free institutions, representative
parliaments, and trial by jury.
The Norse rover—bred to the sea, matchless in skill, daring, loving adventure
and discovery, and with any amount of pluck—is the true type of the British
tar. In light crafts, the Northmen could run into shallow creeks, cross the
North Sea, or boldly push off to face the storms of the open Atlantic. These
old Vikings were seasoned “salts” from their very childhood—“creatures
native and imbued unto the element;” neither in peace nor war, on land nor
sea, did they fear anything but fear.
“Tameless spirits of the past!
Boldest and noblest of earth’s kind were ye—
Conquerors of nations—fathers of a race
Of giant princes.”[59]

In them we see the forerunners of the buccaneers, and the ancestors of those
naval heroes, voyagers, and discoverers—those Drakes and Dampiers, Nelsons
and Dundonalds, Cooks and Franklins, who have won for Britain the proud
title of sovereign of the seas—a title which she is still ready to uphold against
all comers.
In Shetland, we still find the same skilled seamanship, and the same light open
boat, like a Norwegian yawl; indeed, planks for building skiffs are generally
imported from Norway, all prepared and ready to put together. There the
peace-loving fishermen, in pursuit of their perilous calling, sometimes venture
sixty miles off to sea, losing sight of all land, except perhaps the highest peak
of their island-homes left dimly peering just above the horizon-line.
Sometimes they are actually driven, by stress of weather, within sight of the
coast of Norway, and yet the loss of a skiff in the open sea, however high the
waves run, is a thing quite unknown to the skilled Shetlander. The buoyancy of
the skiff (from this word we have ship and skipper) is something wonderful.
Its high bow and stern enables it to ride and rise over the waves like a sea-
duck, although its chance of living seems almost as little, and as perilous, as
that of the dancing shallop or mussel-shell we see whelmed in the ripple. Its
preservation, to the onlooker from the deck of a large vessel, often seems
miraculous. It is the practice, in encountering the stormy blasts of the North
Sea, to lower the lug-sail on the approach of every billow, so as to ride its crest
with bare mast, and to raise it again as the skiff descends into the more
sheltered trough of the wave. By such constant manœuvering, safety is secured
and progress made. When boats are lost—and such tragedies frequently occur,
sometimes leaving poor lonely widows bereft, at one fell swoop, of husband,
father, and brothers, for the crews are too often made up of relatives—it is
generally when they are caught and mastered by strong currents running
between the islands, which neither oar nor sail can stem. Such losses are always
on the coasts—never at sea.
Of the Scandinavian powers of colonising:—There is ample evidence of their
having settled in Shetland, Orkney, and on our coasts, long before those great
outgoings of which we have authentic historical records. To several of these
latter we shall briefly advert, viz., the English, Russian, Icelandic, American,
and Norman.
We may first mention that, in remote ages, this race swept across Europe from
the neighbourhood of the region now called Circassia, lying between the Black
Sea and the Caspian, to the shores of the Baltic, settling on the north-west
coast of Europe. Their traditions, and numerous eastern customs—allied to
the Persians and the inhabitants of the plains of Asia Minor in old Homeric
days—which they brought along with them, all go to confirm their eastern
origin. Nor did they rest here, but, thirsting for adventure in these grim
warrior ages, sailed forth as pirates or settlers, sometimes both, and, as can be
shewn, made their power and influence felt in every country of Europe, from
Lapland to the Mediterranean.
They invaded England in A.D. 429, and founded the kingdoms of South, West,
and East Seaxe, East Anglia, Mercia, Deira, and Bernicea; thus overrunning
and fixing themselves in the land, from Devonshire to North of the Humber.
From the mixture of these Angles, or Saxons, as they were termed by the
Britons, with the previous Belgian settlers and original inhabitants, we have the
Anglo-Saxon race. The Jutes who settled in Kent were from Jutland. In A.D.
787, the Danes ravaged the coast, beginning with Dorsetshire; and, continuing
to swarm across the sea, soon spread themselves over the whole country. They
had nearly mastered it all, when Alfred ascended the throne in 871. At length,
in A.D. 1017, Canute, after much hard fighting, did master it, and England had
Danish kings from that period till the Saxon line was restored in 1042.
In the year A.D. 862, the Scandinavian Northmen established the Russian
empire, and played a very important part in the management of its affairs, even
after the subsequent infusion of the Sclavonic element. In the “Mémoires de la
Société Royale des Antiquaries du Nord,” published at Copenhagen, we find
that, of the fifty names of those composing Ingor’s embassy to the Greek
Emperor at Constantinople in the year A.D. 994, only three were Sclavic, and
the rest Northmen—names that occur in the Sagas, such as Ivar, Vigfast, Eylif,
Grim, Ulf, Frode, Asbrand, &c. The Greeks called them Russians, but
Frankish writers simply Northmen.
In the year A.D. 863, Naddodr, a Norwegian, discovered Iceland,[60] which,
however, had been previously visited and resided in at intervals for at least
upwards of seventy years before that time, by fishermen, ecclesiastics, and
hermits, called Westmen, from Ireland, Iona and other islands of the Hebrides.
Of these visits Naddodr found numerous traces.
In A.D. 874, Ingolf with followers, many of whom were related to the first
families in Norway, fleeing from the tyranny of Harold Harfagra, began the
colonisation of Iceland, which was completed during a space of sixty years.
They established a flourishing republic, appointed magistrates, and held their
Althing, or national assembly, at Thingvalla.
Many of the Northmen who at various times had settled on our shores,
accompanied by their acquired relatives, also set sail and joined their brethren;
thus making use of Britain as a stepping stone between Scandinavia and
Iceland. Many traces of these early links yet remain. We heard of a family in
the island that can trace its descent, in a direct line, from a royal ancestor of
Queen Victoria.
Thus, in this distant volcanic island of the Northern Sea, the old Danish
language was preserved unchanged for centuries; while, in the various Eddas,
were embodied those folk-songs and folk-myths, and, in the sagas, those
historical tales and legends of an age at once heroic and romantic, together
with that folk-lore which still forms the staple of all our old favourite nursery
tales, as brought with them from Europe and the East by the first settlers.[61]
All these, as well as the productions of the Icelanders themselves, are of great
historical and literary value. They have been carefully edited and published, at
Copenhagen, by eminent Icelandic, Danish, and other antiquarians. We would
refer to the writings of Müller, Magnusen, Rafn, Rask, Eyricksson, Torfæus,
and others. Laing has translated “The Heimskringla,” the great historical Saga
of Snorro Sturleson, into English.[62] Various other translations and accounts
of these singularly interesting Eddas, sagas, and ballads, handed down by the
scalds and Sagamen, are to be met with; but by far the best analysis, with
translated specimens, is that contained in Howitt’s “Literature and Romance of
Northern Europe.”[63] We would call attention, in passing, to that Edda,
consisting of the original series of tragic poems from which the German
“Niebelungen-lied” has been derived. Considered as a series of fragments, it is
a marvellous production, and, to our thinking, absolutely unparalleled in
ancient or modern literature, for power, simplicity, and heroic grandeur.
Christianity was established in Iceland in the year 1000. Fifty-seven years later,
Isleif, Bishop of Skálholt, first introduced the art of writing the Roman
alphabet, thus enabling them to fix oral lessons of history and song; for, the
Runic characters previously in use were chiefly employed for monuments and
memorial inscriptions, and were carved on wood staves, on stone or metal. On
analysis, these rude letters will be found to be crude forms and abridgments of
the Greek or Roman alphabet. We have identified them all, with the exception
of a few letters, and are quite satisfied on this point, so simple and obvious is
it, although we have not previously had our attention directed to the fact.
Snorro Sturleson was perhaps one of the most learned and remarkable men
that Iceland has produced.
In 1264, through fear and fraud, the island submitted to the rule of Haco, king
of Norway:—he who died at Kirkwall, after his forces were routed by the
Scots at the battle of Largs. In 1387, along with Norway, it became subject to
Denmark. In 1529, a printing press was established; and in 1550 the Lutheran
reformation was introduced into the island—which form of worship is still
retained.
True to the instinct of race, the early settlers in Iceland did not remain inactive,
but looked westward, and found scope for their hereditary maritime skill in the
discovery and colonising of Greenland. They also discovered Helluland
(Newfoundland), Markland (Nova Scotia), and Vineland (New England). They
were also acquainted with American land, which they called Hvitramannaland,
(the land of the white men), thought to have been North and South Carolina,
Georgia, and Florida. We have read authentic records of these various voyages,
extending from A.D. 877 to A.D. 1347. The names of the principal navigators are
Gunnbiorn, Eric the Red, Biarni, Leif, Thorwald, &c. But the most
distinguished of these American discoverers is Thorfinn Karlsefne, an
Icelander, “whose genealogy,” says Rafn, “is carried back, in the old northern
annals, to Danish, Swedish, Norwegian, Scottish, and Irish ancestors, some of
them of royal blood.” With singular interest we also read that, “in A.D. 1266,
some priests at Gardar, in Greenland, set on foot a voyage of discovery to the
arctic regions of America. An astronomical observation proves that this took
place through Lancaster Sound and Barrow’s Strait to the latitude of
Wellington’s Channel.”
When Columbus visited Iceland in A.D. 1467, he may have obtained
confirmation of his theories as to the existence of a great continent in the
west; for, these authentic records prove the discovery and colonisation of
America, by the Northmen from Iceland, upwards of five hundred years
before he re-discovered it.
The Norman outgoing is the last to which we shall here allude. In A.D. 876 the
Northmen, under Rollo, wrested Normandy from the Franks; and from
thence, in A.D. 1065, William, sprung from the same stock, landed at Hastings,
vanquished Harold, and to this day is known as the Conqueror of England. It
was a contest of Northmen with Northmen, where diamond cut diamond.
Instead of a chapter, this subject, we feel, would require a volume. At the
outset we asserted that northern subjects possessed singular interest for the
British race. In a very cursory manner we have endeavoured to prove it, by
shewing that to Scandinavia, as its cradle, we must look for the germs of that
spirit of enterprise which has peopled America, raised an Indian empire, and
colonised Australia, and which has bound together, as one, dominions on
which the sun never sets; all, too, either speaking, or fast acquiring, a noble
language, which bids fair one day to become universal.
The various germs, tendencies, and traits of Scandinavian character, knit
together and amalgamated in the British race, go to form the essential
elements of greatness and success, and, where sanctified and directed into
right channels, are noble materials to work upon.
It is Britain’s pride to be at once the mistress of the seas, the home of freedom,
and the sanctuary of the oppressed. May it also be her high honour, by wisely
improving outward privileges, and yet further developing her inborn
capabilities, pre-eminently to become the torch-bearer of pure Christianity—
with its ever-accompanying freedom and civilisation—to the whole world!
 INDEX
Abrasions of Ice-drift, 72, 76, 86
Academy, 61
Ailsa, 44
Akur Eyri, 57
Almannagjá, 77-82, 88-89
Alsey, 44
Althing, 86-90, 141
America discovered by Northmen, 306
Amphitheatre, head of Seydisfiord, 201
Amptmen, 154
Anchorage at Reykjavik, 48
Anglen, 294
Angles, 303
Apavatn, 103
Appearance of Great Geyser, 126
Approach to Faröe, 13
Approach to the Geysers, 106-107
Arch of rock under water, 111
Arctic discovery in A.D. 1266, 307
Armannsfell, 140
Arrival of Steamer, 50
Ascent of Hrafnagjá, 92
Ashes carried to Bergen, 169,
to Faröe, 176, 191
Auks, 15
Balls of fire, 164
Bannockburn, Burn’s, in Icelandic, 65
Basin of Great Geyser, 108
Bay at Reykjavik, 160
Beck, Rev. S. D. 84
Beds, 72
Bells of water, 113
Berufiord, 199, 201
Biarni Sveinsson and his sister Salvör, 226
Bible associations, 127-128
Birches, 91, 100, 106
Birds very tame, 100
Bjarnarey, 43
Blae-berries, 106
Blesi, 111, 136,
Blue tint of, 112
Boats’ crews, fishing, 99
Boxes for baggage, 70
Breida Fiord, 47, 199
Breidamerkr Jökul, 197
Bressay, 8
Bridge at Bruará Waterfall, 103-105
Brimnæs Fjall, 208
Britain’s, honour and duty, 308
British race, Origin of, 293
Brown, Capt. John, of Harper’s Ferry, 299
Bruará, 103,
Fording of, 103-105, 135
Bruce’s address at Bannockburn, in Icelandic, 65
Brushwood, 91
Brynjúlfsson, Gísli, 65
Bunsen’s Geyser theory, 124
Buttercups, 108
Butterflies, 105

Canute, 303
Cathedral at Reykjavik, 48, 62-64
Celtic nations, Traits of, 298
Central authority, 297
Central molten fire, 129
Chadbourne’s, Professor, night quarters at Farm, 133
Chalcedony, 204
Changeling, The, 257
Chaos, Iceland in winter like, 75
Chasms, 91
Chimney capped amphitheatre of hills, 205
Christianity introduced, 88, 306
Christian Names, 182
Church Swimming, 170
Church at Thorshavn, 24
Church rebuilding, 83
Churchyard at Reykjavik, 66,
at Thingvalla, 141
Cinder-range, 94-96
Circassian origin of the Northmen, 302
Clearness of northern atmosphere, 47
Clergyman’s daughter married to a Fairy Man, 253
Climate of Iceland, 55-58, 67
Coal, 97
Coast near Reykjavik, 45
Cod-fish Heads, 66
Colonies, Planting, 300, 302
Coloured Clays, 131
Columbus, 42, 307
Column of Fire, 173
Commissariat on Shipboard, 5
Conundrum, Icelandic, 55
Cooking at the Geysers, 115
Coppice, 91
Cormorants, 15
Corrivreckan, 13
Corrugated Lava, 76, 86, 139
Costume of the Faröese, 22, 28, 29;
of Icelandic Ladies, 51, 52, 68
Cowper on Earthquakes and Volcanoes, 193
Cragsmen, 14
Crater, Extinct, 93-94
Crimes, 155
Criminals, 88
Curlew, 72, 134

Dark School, The, 219

Danish Monopolists, 41-42
Death of the Old Norse King, 206
Do. in Icelandic, 207
Defile, 79
Derivation of name Faröe, 12
Descent into Almannagjá, 78-81
Diapensia, 74
Dimon, 14
Dirty Habits, 98
Distaff in use, 207
Distance, Ideas of, compounded, 47
Dome of water, 113
Donny, M., of Ghent’s Geyser Experiment, 125
Drainage needed, 142
Drángr, 44
Dream at the Geyser, 116
Dried Fish, 99