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Clustered standard errors represent the version of the general sandwich variance estimator that correct for (potential) grouping of the observations, e.g., repeated measurements clustered within an individual, or individuals clustered within a hierarchy level (geographical region, educational institution, etc.).

Clustered standard errors represent the version of the general sandwich variance estimator that correct for (potential) grouping of the observations, e.g., repeated measurements clustered within an individual, or individuals clustered within a hierarchy level (geographical region, educational institution, etc.).

Clustered standard errors need to be used when a cluster sample was drawn, see cluster-sample. They are also used when correlations between units is suspected, so as to provide robust inference.