Dear Dr.Schaffer,
I am using clustering in my analysis and I am having some trouble understanding some of the important issues. I have read several papers you have written on clustering issues and hence I am emailing you to seek help.
I am doing a district level analysis for the census year 2001. I have 436 districts in total coming from 17 States. I run an OLS regression of Share of households having tap water access on several controls variables (I have about 25 Regressors). I use the STATA command areg Y on X, absorb(State) cluster(state). I have the state fixed effects and clustered by State.
My question is: I have more regresors(25) than the number of clusters(17). I also find in the STATA output that I have F-stat missing. I would like to seek your advice on whether I can make inference by looking at the individual coefficient estimates and the reported robust Standard errors. I did see your comment on this issue on the STATA listserv. However, I could not find answers as to how to fix this problem of having more regressors than the number of clusters.
I will be extremely thankful if you can kindly help me in this regard.
Sincerely,
Divya.
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Divya Balasubramaniam
Economics PhD Student
Terry College of Business
University of Georgia
Athens -30602.
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