Do I have too many clusters?

[Ayushi Sa]

I have a cross-section of children from a survey sample (IHDS-2011). I want to cluster the standard errors at the PSU level but there are around 2,252 clusters corresponding to 11,700 observations. The mean size of a cluster is 8.54 (median size is 7). Do I have too many clusters?

[Phil Bromiley]

You didn't get a quick answer. You'll increase your chances of a useful answer by following the FAQ on asking questions - provide Stata code in code delimiters, readable Stata output, and sample data using dataex. We don't even know what you're estimating.

Number of clusters is not necessarily a problem. Some argue for larger cluster groups because you normally must assume independence across clusters, but I've seen many analyzes with large numbers of clusters..