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Low amount of clusters should I use vce(cluster) in my xtivreg?
Low amount of clusters should I use vce(cluster) in my xtivreg?

Hey,

I have a panel data with instrumental variables, therefore I am using xtivreg with random effects. My data has 17 regions divided over 6 countries within a time span of 10 years. I have read that it might be better to not include vce(cluster) when the amount of clusters is very low. I am wondering if my 17 clusters for regions would be too low in this regression. Does anyone know if I should include it?

Kind regards,

Emy

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Low amount of clusters should I use vce(cluster) in my xtivreg?

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