New Important Developments in Small Area Estimation

TL;DR

This paper reviews recent advances in small area estimation methods over the past 7-8 years, covering both design-based and model-dependent approaches, to improve reliability of estimates in areas with limited data.

Contribution

It provides a comprehensive overview of new developments in small area estimation methods, including both frequentist and Bayesian approaches, for researchers and practitioners.

Findings

Summarizes recent methodological innovations in SAE

Highlights the application of Bayesian methods in SAE

Discusses improvements in estimation accuracy and precision

Abstract

The problem of small area estimation (SAE) is how to produce reliable estimates of characteristics of interest such as means, counts, quantiles, etc., for areas or domains for which only small samples or no samples are available, and how to assess their precision. The purpose of this paper is to review and discuss some of the new important developments in small area estimation methods. Rao [Small Area Estimation (2003)] wrote a very comprehensive book, which covers all the main developments in this topic until that time. A few review papers have been written after 2003, but they are limited in scope. Hence, the focus of this review is on new developments in the last 7-8 years, but to make the review more self-contained, I also mention shortly some of the older developments. The review covers both design-based and model-dependent methods, with the latter methods further classified into frequentist and Bayesian methods. The style of the paper is similar to the style of my previous review on SAE published in 2002, explaining the new problems investigated and describing the proposed solutions, but without dwelling on theoretical details, which can be found in the original articles. I hope that this paper will be useful both to researchers who like to learn more on the research carried out in SAE and to practitioners who might be interested in the application of the new methods.