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Variance Estimation with Dependence and Heterogeneous Means

Luther Yap

arXiv 12 Mar 2026 · Econometrics

arXiv:2603.11497 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper considers the problem of estimating the variance of a sum of a triangular array of random vectors with heterogeneous means. When random vectors exhibit two-way cluster dependence or weak dependence, standard variance estimators designed under homogeneous means can underestimate the true variance, which results in subsequent tests being oversized. To restore validity, this paper proposes a simple conservative variance estimator robust to heterogeneous means and shows its asymptotic validity.

Citation extraction

12
references
19
in-text mentions
12
distinct cited
2
self-citations
7,752
main-text words

appendix boundary found by appendix_command · 68% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Xu, Ruonan and Yap, Luther (2024) Clustering with Potential Multidimensionality: Inference and Practice self0.73732100%
2Abadie, Alberto and Athey, Susan and Imbens, Guido W and Wooldridge,… (2020) Sampling-based versus design-based uncertainty in regression analysis0.64422100%
3Abadie, Alberto and Athey, Susan and Imbens, Guido W and Wooldridge,… (2023) When should you adjust standard errors for clustering?0.64422100%
4Davezies, Laurent and D’haultfœuille, Xavier and Guyonvarch, Yannick (2021) Empirical process results for exchangeable arrays0.64422100%
5Casini, Alessandro (2023) Theory of evolutionary spectra for heteroskedasticity and autocorrelation robust inference in possibly misspecified and nonstati…0.51121100%
6Chan, Kin Wai (2022) Optimal difference-based variance estimators in time series: A general framework0.51121100%
7Andrews, Donald WK (1991) Heteroskedasticity and autocorrelation consistent covariance matrix estimation0.40511100%
8Cameron, A Colin and Gelbach, Jonah B and Miller, Douglas L (2011) Robust inference with multiway clustering0.40511100%
9Chiang, Harold D and Hansen, Bruce E and Sasaki, Yuya (2024) Standard errors for two-way clustering with serially correlated time effects0.40511100%
10Kojevnikov, Denis and Marmer, Vadim and Song, Kyungchul (2021) Limit theorems for network dependent random variables0.40511100%

Showing the top 10 of 12 scored citations.