If you have nested data, this chapter is essential for you! What is meant by nested data is that observations share a common context. The examples include:
Consumers nested within shops
Employees nested within managers
Teachers and/or students nested within schools
Nurses, patients, and/or physicians nested within hospitals
Inhabitants nested in neighborhoods
We could imagine way more cases of data nesting. What they all have in common is a data structure similar to the one depicted in the following figure:
We will only discuss two levels of data with unique membership in this chapter, but of course, more complex situations can arise. For instance, in all the preceding examples, shops, managers, schools, hospitals, and neighborhoods can be nested within higher level units (for example, companies, cities) which could be a third level in the analyses). Also, crossed memberships could be imagined, for example, patients sharing a hospital but not a neighborhood...