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Transforming response values in small area prediction

Author

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  • Sugasawa, Shonosuke
  • Kubokawa, Tatsuya

Abstract

In real applications of small area estimation, one often encounters data with positive response values. The use of a parametric transformation for positive response values in the Fay–Herriot model is proposed for such a case. An asymptotically unbiased small area predictor is derived and a second-order unbiased estimator of the mean squared error is established using the parametric bootstrap. Through simulation studies, a finite sample performance of the proposed predictor and the MSE estimator is investigated. The methodology is also successfully applied to Japanese survey data.

Suggested Citation

  • Sugasawa, Shonosuke & Kubokawa, Tatsuya, 2017. "Transforming response values in small area prediction," Computational Statistics & Data Analysis, Elsevier, vol. 114(C), pages 47-60.
    • Handle: RePEc:eee:csdana:v:114:y:2017:i:c:p:47-60
    DOI: 10.1016/j.csda.2017.03.017
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    References listed on IDEAS

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