I have a question regarding the use of vce(robust) or vce(cluster ind) for my cross-sectional model. My dataset is small, with 116 observations.
The variable I concerned about is the dummy variable and it's only significant in the last case. There are differences in SE when I use vce(robust) or vce(cluster ind).
I want to ask if it's right if I use vce(cluster ind) in this model and I hope I could understand why there are big changes in my model.
I attached the code here with 3 model: OLS, vce(robust), vce(cluster ind).
Thank you so much.
Best regards,
Ha Nguyen
Code:
. reg Y dummy X1 size cash age2 analyst mbratio Source | SS df MS Number of obs = 116 -------------+---------------------------------- F(7, 108) = 2.43 Model | 393.729615 7 56.2470879 Prob > F = 0.0237 Residual | 2499.90356 108 23.1472552 R-squared = 0.1361 -------------+---------------------------------- Adj R-squared = 0.0801 Total | 2893.63317 115 25.1620276 Root MSE = 4.8112 ------------------------------------------------------------------------------ Y | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- dummy | -1.449351 .9828503 -1.47 0.143 -3.39753 .4988292 X1 | .0673247 .028259 2.38 0.019 .0113104 .123339 size | -.8122102 .400049 -2.03 0.045 -1.605177 -.0192437 cash | -15.73149 8.188105 -1.92 0.057 -31.96174 .4987515 age2 | .9146657 .4920407 1.86 0.066 -.0606444 1.889976 analyst | .0638981 .6261884 0.10 0.919 -1.177316 1.305112 mbratio | -.2066817 .2757556 -0.75 0.455 -.7532772 .3399137 _cons | 14.04019 8.693411 1.62 0.109 -3.191661 31.27204 . reg Y dummy X1 size cash age2 analyst mbratio ,robust Linear regression Number of obs = 116 F(7, 108) = 1.84 Prob > F = 0.0870 R-squared = 0.1361 Root MSE = 4.8112 ------------------------------------------------------------------------------ | Robust Y | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- dummy | -1.449351 1.007996 -1.44 0.153 -3.447374 .5486733 X1 | .0673247 .0248537 2.71 0.008 .0180604 .116589 size | -.8122102 .3700793 -2.19 0.030 -1.545772 -.0786489 cash | -15.73149 9.472885 -1.66 0.100 -34.5084 3.04541 age2 | .9146657 .615406 1.49 0.140 -.3051757 2.134507 analyst | .0638981 .3762059 0.17 0.865 -.6818073 .8096035 mbratio | -.2066817 .1959103 -1.05 0.294 -.5950099 .1816464 _cons | 14.04019 7.764501 1.81 0.073 -1.350401 29.43078 ------------------------------------------------------------------------------ reg Y dummy X1 size cash age2 analyst mbratio , vce(cluster ind) Linear regression Number of obs = 116 F(7, 13) = 27.17 Prob > F = 0.0000 R-squared = 0.1361 Root MSE = 4.8112 (Std. Err. adjusted for 14 clusters in ind) ------------------------------------------------------------------------------ | Robust Y | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- dummy | -1.449351 .6598815 -2.20 0.047 -2.874938 -.0237631 X1 | .0673247 .021427 3.14 0.008 .0210345 .1136149 size | -.8122102 .2410903 -3.37 0.005 -1.333054 -.2913664 cash | -15.73149 3.602049 -4.37 0.001 -23.51325 -7.94974 age2 | .9146657 .3727299 2.45 0.029 .1094317 1.7199 analyst | .0638981 .221543 0.29 0.778 -.4147165 .5425127 mbratio | -.2066817 .1792627 -1.15 0.270 -.5939553 .1805919 _cons | 14.04019 4.305863 3.26 0.006 4.737936 23.34244 ------------------------------------------------------------------------------
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