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Small area estimation of complex parameters under unit‐level models with skew‐normal errors

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  • Mamadou S. Diallo
  • J. N. K. Rao

Abstract

The widely used Elbers–Lanjouw–Lanjouw (ELL) method of estimating complex parameters for areas with small sample sizes uses a fitted nested‐error model based on survey data to create simulated censuses of the variable of interest. The complex parameters obtained from each simulated censuses are then averaged to get the estimate. An empirical best (EB) method, under the nested‐error model with normal errors, is significantly more efficient, in terms of mean square error (MSE), than the ELL method when the normality assumption holds. However, it can perform poorly in terms of MSE when the model errors are not normally distributed. We relax normality by assuming skew‐normal errors, derive EB estimators, and study their MSE relative to EB based on normality and ELL. We propose bootstrap methods for MSE estimation. We also study an improvement to ELL by conditioning on the area random effects and without parametric assumptions on the errors.

Suggested Citation

  • Mamadou S. Diallo & J. N. K. Rao, 2018. "Small area estimation of complex parameters under unit‐level models with skew‐normal errors," Scandinavian Journal of Statistics, Danish Society for Theoretical Statistics;Finnish Statistical Society;Norwegian Statistical Association;Swedish Statistical Association, vol. 45(4), pages 1092-1116, December.
    • Handle: RePEc:bla:scjsta:v:45:y:2018:i:4:p:1092-1116
    DOI: 10.1111/sjos.12336
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    Citations

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    Cited by:

    1. Azzalini, Adelchi, 2022. "An overview on the progeny of the skew-normal family— A personal perspective," Journal of Multivariate Analysis, Elsevier, vol. 188(C).
    2. Reinaldo B. Arellano-Valle & Adelchi Azzalini, 2022. "Some properties of the unified skew-normal distribution," Statistical Papers, Springer, vol. 63(2), pages 461-487, April.
    3. Corral Rodas,Paul Andres & Molina,Isabel & Nguyen,Minh Cong, 2020. "Pull Your Small Area Estimates up by the Bootstraps," Policy Research Working Paper Series 9256, The World Bank.
    4. Chwila Adam & Żądło Tomasz, 2020. "On the choice of the number of Monte Carlo iterations and bootstrap replicates in Empirical Best Prediction," Statistics in Transition New Series, Statistics Poland, vol. 21(2), pages 35-60, June.
    5. Masaki,Takaaki & Newhouse,David Locke & Silwal,Ani Rudra & Bedada,Adane & Engstrom,Ryan, 2020. "Small Area Estimation of Non-Monetary Poverty with Geospatial Data," Policy Research Working Paper Series 9383, The World Bank.
    6. Adam Chwila & Tomasz Żądło, 2020. "On the choice of the number of Monte Carlo iterations and bootstrap replicates in Empirical Best Prediction," Statistics in Transition New Series, Polish Statistical Association, vol. 21(2), pages 35-60, June.
    7. Isabel Molina & Paul Corral & Minh Nguyen, 2022. "Estimation of poverty and inequality in small areas: review and discussion," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 31(4), pages 1143-1166, December.
    8. Isabel Molina, 2020. "Discussion of "Small area estimation: its evolution in five decades", by Malay Ghosh," Statistics in Transition New Series, Polish Statistical Association, vol. 21(4), pages 40-44, August.
    9. Molina Isabel, 2020. "Discussion of “Small area estimation: its evolution in five decades”, by Malay Ghosh," Statistics in Transition New Series, Statistics Poland, vol. 21(4), pages 40-44, August.
    10. Guadarrama, María & Morales, Domingo & Molina, Isabel, 2021. "Time stable empirical best predictors under a unit-level model," Computational Statistics & Data Analysis, Elsevier, vol. 160(C).

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