st: comparing policies across countries: multilevel estimation?

["Laura R." <laura.roh@googlemail.com>]

Dear Stata users,

my question is whether I have to use multilevel models or not for my
estimations.

I have panel data with individual data, and I added some variables on
the country level, e.g. the unemployment rate and some dummies for
different policies. Several countries may have the same policies or
not.

As my aim is the estimation of the impact of these policies on the
dependent variable, I wonder if I have to estimate multilevel models
or not. As I have understood it, in multilevel models you cluster
groups of individuals, e.g. by country. But, as my aim is to find out
about differences on the policies on the country level, wouldn't the
clustering by country somehow cancel out (i.e. abolish) differences in
the policies between the countries?

If I had to use multilevel models, are they also appropriate for a
two-stage selection process? If so, I would have to use -xtmelogit- in
the first step and -xtmixed- in the second step, wouldn't I?

Thanks.

Kind Regards
Laura
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