Multilevel models are often thought unreliable with small numbers of clusters (upper-level units). A noted Monte Carlo study by Stegmueller (2013) amplified concerns about maximum likelihood methods producing biased estimates and anti-conservative inference. This article counters that assessment, clarifying that ML coefficient estimators in linear multilevel models remain unbiased even when cluster counts are low. The authors demonstrate this by attributing Stegmueller's apparent bias to Monte Carlo error and a design flaw in his simulation. They then provide two solutions: 1) Employ restricted maximum likelihood for variance parameter estimation, and 2) Utilize t-distributions with appropriate degrees of freedom for inference when cluster sizes are small or unequal.
💡 Key Findings
- ML coefficient estimates remain unbiased even with few upper-level units
- Stegmueller's (2013) bias findings stem from Monte Carlo error and flawed simulation design
🛠️ Methodology Addressed
- Demonstrates use of restricted ML for variance components
- Suggests t-distribution based inference over standard approaches
📊 Real-world Significance
This work shows that accurate multilevel analysis is achievable using common tools, even when faced with limited upper-level units. Practitioners can continue employing familiar maximum likelihood methods without fear of bias from small cluster counts.
