Clustering and dummy inclusion in repeated cross-sections
Dear Statalist users,
I have a question concerning an iv-regression. I have a sample of individuals in 5 countries over 2 years (not panel but repeated cross-sections). And I am running an ivreg2 using an instrument that varies at the region-year level. Now I am concerned about the dummies I should include in my regressions and on which variable I should cluster my standard errors. I thought about including (country x year) dummies and clustering my observations at the region level since I suppose that individuals living in the same region are correlated. I am not sure if what I'm doing is correct.
I have a question concerning an iv-regression. I have a sample of individuals in 5 countries over 2 years (not panel but repeated cross-sections). And I am running an ivreg2 using an instrument that varies at the region-year level. Now I am concerned about the dummies I should include in my regressions and on which variable I should cluster my standard errors. I thought about including (country x year) dummies and clustering my observations at the region level since I suppose that individuals living in the same region are correlated. I am not sure if what I'm doing is correct.
