Simulating multilevel data

clear

set obs 200              // Number of level-2 units
gen j = _n              // ID for level-2 units
gen c_j = rnormal(0,1)  // Level-2 covariate
gen u_j = rnormal(0,1)  // Level-2 error term
expand 100              // Number of level-1 units per level-2 unit
bysort j: gen i = _n    // ID for level-1 units
gen x_ij = rnormal(0,1) // Level-1 covariate
gen e_ij = rnormal(0,1) // Level-1 error term
gen y_ij = 1 + 1 * x_ij + 1 * c_j + u_j + e_ij // Regression equation

mixed y_ij x_ij c_j