Extend the empirical analysis reported in Section 4.21 using the DDK2011 dataset on the textbook website.. Do a regression of standardized test score (totalscore normalized to have zero mean and variance 1) on tracking, age, gender, being assigned to the contract teacher, and student’s percentile in the initial distribution. (The sample size will be smaller as some observations have missing variables.)

Calculate standard errors using both the conventional robust formula, and clustering based on the school.

(a) Compare the two sets of standard errors. Which standard error changes the most by clustering?

Which changes the least?

(b) How does the coefficient on tracking change by inclusion of the individual controls (in comparison to the results from (4.60))?