This week we're introducing our new series that we decided to call 'Ask Guido.' Guido Imbens has kindly agreed to answer technical questions every so often and we are thrilled. For this first installment, Guido starts by answering a question about standard errors and the appropriate level of clustering in matching.
One question that often comes up in empirical work concerns the appropriate way to calculate standard errors, and in particular the correct level of clustering. Here is a specific version of the question that someone posed, slightly paraphrased: