Robustness of parameter and standard error estimates against ignoring a contextual effect of a subject-level covariate in cluster-randomized trials

In experimental research, it is not uncommon to assign clusters to conditions. When analysing the data of such cluster-randomized trials, a multilevel analysis should be applied in order to take into account the dependency of first-level units (i.e., subjects) within a second-level unit (i.e., a cluster). Moreover, the multilevel analysis can handle covariates on both levels. If a first-level covariate is involved, usually the within-cluster effect of this covariate will be estimated, implicitly assuming the contextual effect to be equal. However, this assumption may be violated. The focus of the present simulation study is the effects of ignoring the inequality of the within-cluster and contextual covariate effects on parameter and standard error estimates of the treatment effect, which is the parameter of main interest in experimental research. We found that ignoring the inequality of the within-cluster and contextual effects does not affect the estimation of the treatment effect or its standard errors. However, estimates of the variance components, as well as standard errors of the constant, were found to be biased.