Consider this simple simulated dataset (all groups are normally distributed with sd=1) made up by 4 level 1 groups (lv1) and 2 level 2 groups. The mean of the 4 distribution is 5, 15, 5 and 15 respectively. Here is the lmer output:
Linear mixed model fit by maximum likelihood ['lmerMod']
Formula: y ~ 1 + (1 | lv2/lv1)
Data: df
AIC BIC logLik deviance df.resid
11499.1 11524.2 -5745.5 11491.1 3996
Scaled residuals:
Min 1Q Median 3Q Max
-3.5256 -0.6561 -0.0039 0.6748 3.8039
Random effects:
Groups Name Variance Std.Dev.
lv1:lv2 (Intercept) 2.502e+01 5.002330
lv2 (Intercept) 1.679e-05 0.004098
Residual 1.025e+00 1.012470
Number of obs: 4000, groups: lv1:lv2, 4; lv2, 2
Fixed effects:
Estimate Std. Error t value
(Intercept) 10.004 2.501 4
As you can see the variance of lv1 groups is approximately 25, If I understand correctly It is calculated as the variance (biased) of points around the mean of each level 2 group. In formula: $$ \sigma_1 \approx \frac{(5-10)^2 + (15-10)^2 + (5-10)^2 + (15-10)^2}{4} = 25 $$ And the variance in level 2 groups is the variance around the 'overall mean' of the level 2 groups, thus is 0.
Now consider this second dataset. It's the same as before but the level 2 group g2
has been shifted up by 20 units
The means for the 4 groups are {5,15,25,35} respectively. This is the lmer output:
Linear mixed model fit by maximum likelihood ['lmerMod']
Formula: y ~ 1 + (1 | lv2/lv1)
Data: df2
AIC BIC logLik deviance df.resid
11428.9 11454.1 -5710.5 11420.9 3996
Scaled residuals:
Min 1Q Median 3Q Max
-3.6374 -0.6673 0.0046 0.6538 3.7098
Random effects:
Groups Name Variance Std.Dev.
lv1:lv2 (Intercept) 50.015 7.072
lv2 (Intercept) 74.495 8.631
Residual 1.006 1.003
Number of obs: 4000, groups: lv1:lv2, 4; lv2, 2
Fixed effects:
Estimate Std. Error t value
(Intercept) 19.999 7.053 2.835
I would expect that the variance for lv1 groups to be:
$$ \sigma_1 = \frac{(5-10)^2 + (15-10)^2 + (25-30)^2 + (35-30)^2}{4} = 25 $$
But in lmer() is actually calculated differently, and is twice as much.
Do someone knows why or how this variance is calculated?