Understanding and Teaching Within-Cluster Correlation in Complex Surveys
This econometrics pedagogy paper demonstrates the importance of using cluster standard errors with data generated from complex surveys. Simulation is used to show that both classic ordinary least squares and robust standard errors perform poorly in the presence of within-cluster correlated errors, while cluster standard errors are much better. We take advantage of Excel’s spreadsheet interface to produce clear, strong visuals of the data generation process and intuitively explain key results. Stata and R implementations are also provided. We conclude with suggestions for how to use these files in the classroom.
|Date of creation:||Jul 2013|
|Date of revision:|
|Publication status:||Published in Journal of Econometric Methods, Volume 2, Issue 1, March 2013, pages 101-112|
|Contact details of provider:|| Web page: http://www.depauw.edu/academics/departments-programs/economics--management/|
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- Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, December.
- Barreto,Humberto & Howland,Frank, 2006. "Introductory Econometrics," Cambridge Books, Cambridge University Press, number 9780521843195, December.
- Barreto Humberto & Raghav Manu, 2013.
"Understanding and teaching unequal probability of selection,"
Journal of Econometric Methods,
De Gruyter, vol. 2(1), pages 101-112, July.
- Humberto Barreto & Manu Raghav, 2011. "Understanding and Teaching Unequal Probability of Selection," Working Papers 2011-01, DePauw University, Department of Economics and Management.
- Raghav, Manu & Barreto, Humberto, 2011. "Understanding and teaching unequal probability of selection," MPRA Paper 32334, University Library of Munich, Germany.
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