An Empirical Evaluation of Small Area Estimators

UPF Economics and Business Working Paper No. 674

27 Pages Posted: 31 Aug 2003

See all articles by Alex Costa Saenz de San Pedro

Alex Costa Saenz de San Pedro

Institut d'Estadistica de Catalunya

Albert Satorra

Universitat Pompeu Fabra

Eva Ventura

Universitat Pompeu Fabra

Abstract

This paper investigates the comparative performance of five small area estimators. We use Monte Carlo simulation in the context of both theoretical and empirical populations. In addition to the direct and indirect estimators, we consider the optimal composite estimator with population weights, and two composite estimators with estimated weights: One that assumes homogeneity of within area variance and square bias, and another one that uses area specific estimates of variance and square bias. It is found that among the feasible estimators, the best choice is the one that uses area specific estimates of variance and square bias.

Keywords: Regional statistics, small areas, root mean square error, direct, indirect and composite estimators

JEL Classification: C15, C52, J21

Suggested Citation

Costa Saenz de San Pedro, Alex and Satorra, Albert and Ventura, Eva, An Empirical Evaluation of Small Area Estimators. UPF Economics and Business Working Paper No. 674, Available at SSRN: https://ssrn.com/abstract=428200 or http://dx.doi.org/10.2139/ssrn.428200

Alex Costa Saenz de San Pedro

Institut d'Estadistica de Catalunya ( email )

Via Laietana, 58
Barcelona, 08003
Spain
(93) 412.00.88 (Phone)
(93) 412.31.45 (Fax)

Albert Satorra

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34-93) 542 17 58 (Phone)
(34-93) 542 17 46 (Fax)

Eva Ventura (Contact Author)

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+343-542-17-60 (Phone)
+343-542-17-46 (Fax)

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