#StackBounty: #stata #clustered-standard-errors Why standard error being clustered at industry or firm level when the aggregation level…

Bounty: 50

From reading this discussion, there is one sentence

Standard errors should be clustered at the city level, i.e. the level
of aggregation
at which the treatment occurs

In Dasgupta, 2019‘s paper, the aggregation level is country (laws have impact on all firms in a country).
I am quite new to cluster standard error but I saw the paper of Dasgupta, 2019, in some cases, he did cluster for the country (table 11), in some cases, he did the cluster for industry (table 8), in some cases, he did cluster for firm (table 12).

Is there any suggestion for understanding cluster and double cluster for a novice then?

Get this bounty!!!

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