Can We Trust Cluster-Corrected Standard Errors? An Application of Spatial Autocorrelation with Exact Locations Known

John Gibson, Bonggeun Kim () and Susan Olivia

Working Papers in Economics from University of Waikato

Abstract: Standard error corrections for clustered samples impose untested restrictions on spatial correlations. Our example shows these are too conservative, compared with a spatial error model that exploits information on exact locations of observations, causing inference errors when cluster corrections are used.

Keywords: clustered samples; GPS; spatial correlation (search for similar items in EconPapers)
JEL-codes: C31 C81 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2010-08-18
New Economics Papers: this item is included in nep-ecm, nep-ets and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:wai:econwp:10/07

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