[R-sig-ME] intra-class correlation coeff

[Andrew J Tyre]

Raphaelle,

The model you are estimating assumes that the differences among markets 
(on a log scale) are multivariate normal with mean 0 and variance sigma^2 
= 0.07 - and zero correlation among markets. Another way of interpreting 
the magnitude of that value is to compare the standard deviation of the 
market random effect with the size of the intercept - so you have a CV 
there of 0.27 / |-1.37| = 20% not an insignificant amount of variation 
among markets. This model allows the mean responses to be similar WITHIN 
markets - accounting for the correlations between traders at the same 
market. 

hth,

Drew Tyre

School of Natural Resources
University of Nebraska-Lincoln
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