Dear Statalisters,

I am currently working on a dataset in China regarding Individual spending. I have panel data and run something like the following:

Code:
xtset ID year
xtreg Spending HomicideRateCity PersonalIncomeCharacteristics Gender Age HouseholdCharacteristics, fe vce(XXXXXX)
Basically, I have a panel data set with numerous individuals. I have a measure for HomocideRate in the respective city the individual lived in at time t. I therefore want to cluster at city level. I think this should make sense. Then furthermore I have variables on individual characteristics, like height, age, gender, and personal income characteristics.
Then I have more characteristics across households: The survey basically asks things about the household, i.e. 'How much children live in this household', 'to how many cars does this household have access' etc. I also include these in my individual regression, where the values are all the same for each individual member of the household. From my understanding, I now also should cluster at the household level.

Is this thinking correct? --> I essentially want to cluster at City- AND at Household-level.

Many thanks in advance,
Andreas