Cluster-corrected standard errors with exact locations known: An example from rural Indonesia

John Gibson, Bonggeun Kim, Susan Olivia

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3 Citations (Scopus)


Cluster-corrected standard errors are widely used but may sometimes be inappropriate since household surveys are increasingly geo-referenced. Compared with the appropriate spatial error models that use details on exact locations, cluster corrections impose untested restrictions on spatial correlations. Our example from rural Indonesia suggests cluster corrections are too conservative and may cause inference errors.
Original languageEnglish
Pages (from-to)1857 - 1863
Number of pages7
JournalEconomics Bulletin
Issue number3
Publication statusPublished - 2014

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