st: 'nonest' option in 'xtreg'

[<S.Ha@lse.ac.uk>]

Hello all, 
 
I have not received any comment on my recent post. So, I am trying once more. I hope any of you can help. Thank you. 
 
My panel is an individual person and I am trying to cluster individuals by their household. A simple specification would look like
 
xtset  individual year, yearly
xtreg  x y, cluster(household)
 
However, I have an error message of "panels are not nested within clusters". With some examination through Statalist, I realised that my panels (individuals) are not in the same cluster (household) all the time (because individuals move in and out of households over time). Then, I've found that 'nonest' option somehow helps not receiving the same error. Though I wanted to find out more about this option, the information online seems limited. So, I'd like to ask you (1) what 'nonest' option does and (2) whether it is a right cure in my case. 
 
Sejeong. 

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