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Can we trust cluster-corrected standard errors? An application of spatial autocorrelation with exact locations known

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.
Type
Working Paper
Type of thesis
Series
Department of Economics Working Paper Series
Citation
Gibson, J., Kim, B. & Olivia, S. (2010). Can we trust cluster-corrected standard errors? An application of spatial autocorrelation with exact locations known. (Department of Economics Working Paper Series, Number 10/07). Hamilton, New Zealand: University of Waikato.
Date
2010-11
Publisher
Waikato Management School
Degree
Supervisors
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