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Abstract The investigation of neighborhood effects on health raises a series of conceptual and methodological issues related to the presence of observations at a lower level (e.g., individuals) nested within observations at a higher level (e.g., neighborhoods). Many of these issues are generalizable to a broad set of common situations in epidemiology involving nested data structures. The presence of multiple levels of organization (or nested sources of variability) requires the development of theories about how factors defined at different levels are related to health outcomes, and identifying the most appropriate research design for the question being investigated based on the level about which inferences are to be made and the level (or levels) at which the constructs relevant to the outcome are defined and measured. This chapter reviews the use of group-level variables in epidemiology; summarizes the characteristics of ecological studies, studies of individuals, and multilevel studies; and discusses some of the conceptual and methodological challenges that multilevel analysis faces, using the example of the investigation of neighborhood effects on health.
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