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Small area estimation on poverty indicators

J.N.K. Rao and Isabel Molina

DES - Working Papers. Statistics and Econometrics. WS from Universidad Carlos III de Madrid. Departamento de Estadística

Abstract: We propose to estimate non-linear small area population quantities by using Empirical Best (EB) estimators based on a nested error model. EB estimators are obtained by Monte Carlo approximation. We focus on poverty indicators as particular non-linear quantities of interest, but the proposed methodology is applicable to general non-linear quantities. Small sample properties of EB estimators are analyzed by model-based and design-based simulation studies. Results show large reductions in mean squared error relative to direct estimators and estimators obtained by simulated censuses. An application is also given to estimate poverty incidences and poverty gaps in Spanish provinces by sex with mean squared errors estimated by parametric bootstrap. In the Spanish data, results show a significant reduction in coefficient of variation of the proposed EB estimators over direct estimators for most domains.

Keywords: Empirical; best; estimator; Parametric; bootstrap; Poverty; mapping; Small; area; estimation (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm
Date: 2009-03
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