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st: IVREG2 and Standard Errors when Number of Clusters is Small


From   Jessie C <[email protected]>
To   [email protected]
Subject   st: IVREG2 and Standard Errors when Number of Clusters is Small
Date   Sun, 29 Jan 2012 10:58:29 -0500

In this presentation by Colin Cameron:
http://www.stata.com/meeting/mexico11/materials/cameron.pdf

it is suggested to compute the t-statistic based on G-1 or G-K-1
degrees of freedom.  I cannot quite tell which.  G is the number of
clusters.  K is the number of regressors that are grouped that bring
about the Moulton problem.

Nevertheless, I cannot quite discern which paper Cameron is referring
to that recommends this.

Is it Donald and Lang (2007)?  Looking at that paper suggests
averaging and aggregating micro-level data.  My data is already at the
country level so I'm not sure if that is relevant.

Is it Bester, Conley, and Hansen?

Is it a different one?

Thank you very much for any help you can provide.
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