Hello folks!

I have read this paper today: http://ftp.iza.org/dp9311.pdf

If you scroll to page 11, they say with regards to their methodology: We use linear regression with fixed-effects at the individual-area-level to model the direct effect of violent crime victimisation on the wellbeing of individual i living in area a in period t.

What does this mean/how does it work? They use FE in panel data, but have fixed effects on individuals, areas, and time? How does this work.
Background: I am currently running a panel data analysis and run FE with fixed effects on individuals between the time periods. How do I include area effects? I do have variables indicating the town the individual lived in at time t=0 and t=1, but I am not doing anything with these variables as of now. This variable is also numerical.

I hope this is not a really stupid question and am greatful for any input!

Andreas