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st: xtivreg2: Clustererd Errors and IV Validity


From   "Ayesha Malhotra" <[email protected]>
To   [email protected]
Subject   st: xtivreg2: Clustererd Errors and IV Validity
Date   Thu, 20 Oct 2011 18:01:33 -0600 (MDT)

Dear Users,

I used the fe "robust" option for xtivreg2 and my instruments seem
reasonable (based on the reported underid., weak id., and overid. tests.)

When I used the fe "cluster" option for the same data/model, my
instruments appear to be valid but are now "weak." I'm wondering what the
econometric explanation is and whether you have any suggestions.

Thank you for your time,

Ayesha

Ayesha Malhotra
Assistant Professor, Strategy & Global Management
Haskayne School of Business
University of Calgary
2500 University Drive NW
Calgary, Alberta T2N 1N4
Canada

Tel: 403-220-7146
Fax: 403-282-0095


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