The Effect of Two-Stage Sampling on theFStatistic

Abstract

Abstract The assumption of iid observations that underlies many statistical procedures is called into question when analyzing complex survey data. The population structure—particularly the existence of clusters in two-stage samples that usually exhibit positive intracluster correlation—invalidates the independence assumption. Kish and Frankel (1974) investigated the impact of this fact on regression analysis by using the standard sample-survey-theory framework; Campbell (1977) and Scott and Holt (1982) used the linear model framework. In general, although ordinary least squares (OLS) procedures are unbiased but not fully efficient for estimation of the regression coefficients, serious difficulties can arise when using OLS estimators for second-order terms. Variances of the OLS estimators for the regression coefficients can be larger (sometimes much larger) than the usual OLS variance expression would indicate. Failure to consider this possibility leads to underestimation of variances, with consequences fo...