# Cluster standard error _versus_ fixed effects

I am working with experimental data -correspondence test in the rental housing market-. On which ground can I choose between:

1. F.E. for the region where the apt is and cluster s.e. on the day the application to the apt was sent
2. cluster s.e. on region where the apt is and F.E. for the day the application was sent (day is too much, perhaps, better w-e or month)?

More in general.

On what ground can I choose whether to control for a variable or to cluster the s.e. on that variable?

The first option changes the estimate of the coefficients while the second changes the estimate of the s.e.'s....both of them should be used when I suspect there is something which is substantially non observable.

So, I know the practical difference between option 1 and 2, but on what ground do I choose?

• A more detailed answer can be found here: cameron.econ.ucdavis.edu/research/… – user54132 Aug 15 '14 at 10:52
• While this link may answer the question, it is better to include the essential parts of the answer here and provide the link for reference. Link-only answers can become invalid if the linked page changes. – Andy Aug 15 '14 at 12:00