On measuring the quality of indirect small area estimates

This paper discusses in detail issues dealing with the technical aspects of designing and conducting surveys. It is intended for an audience of survey methodologists.

Samples sizes in small population areas are typically very small. As a result, customary, area-specific, direct estimators of Small Area Means do not provide acceptable quality in terms of Mean Square Error (MSE). Indirect estimators that borrow strength from related areas by linking models based on similar auxiliary data are now widely used for small area estimation. Such linking models are either implicit (as in the case of synthetic estimators) or explicit (as in the case of model-based estimators). In the Frequentist approach, the quality of an indirect estimator is measured by its estimated MSE while the posterior variance of the Small Area Mean is used in the Bayesian approach. This paper reviews some recent work on estimating MSE and the evaluation of posterior variance.