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.

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.

Publisher

Waikato Management School

Degree

Type of thesis

Supervisor