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st: xtreg, re with cluster option

From   "Elena Giarda" <>
To   <>
Subject   st: xtreg, re with cluster option
Date   Tue, 25 Jul 2006 10:31:12 +0200

Dear Statalisters,

I have to run a panel data regression with random effects of individual wages on a set of explicative variables which include a macro variable (the unemployment rate).

Note that I use Stata8.

I'm facing the problem of the different level of aggregation of individual wages and aggregate unemployment rate. With a pooled regression I'm aware that I can use the "cluster" option: e.g. cluster(year). Unfortunately this option is not availble for xtreg in Stata8.

Has anyone ever faced this problem? Do you have any suggestions on how to proceed?

Many thanks!
Elena Giarda

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