Cluster Sample Inference with Very Few Groups
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Johan Vikström: IFAU Uppsala, Box 513, S-752 20 Uppsala, Sweden and UCLS, Department of Economics University, firstname.lastname@example.org
Econometrics Letters, 2016, vol. 3, issue 1, 1-10
If the number of clusters equals the number of cluster-invariant regressors the usual clusters-specific standard errors cannot be computed. One important example is the difference in differences setting with two groups and two time periods. This paper introduces a new method to calculate how large the within cluster correlation of the model errors can be yet still enable OLS coefficients to retain statistical significance at a desired level. This sensitivity approach is applied to previous results regarding the effects of workers compensation benefits.
Keywords: Cluster effect; cluster robust; difference in difference; sensitivity; workers compensation. (search for similar items in EconPapers)
JEL-codes: C12 C21 C23 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:bmo:bmoart:v:3:y:2016:i:1:p:1-10
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