Regarding your first question, you can allow for intragroup correlation by
using the cluster option, that is vce(cluster clustvar).
Concerning your second query, if I understand you right, why not try to
split your "big"-category into two groups/categories? In addition, if think
you could use 'blogit' to account for the grouped data or the alternative
described here:
http://www.stata.com/support/faqs/stat/grouped.html
Best,
Johan Hellstr�m
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