Applying the Lavallée and Hidiroglou method to obtain stratification boundaries for the Census Bureau’s Annual Capital Expenditures Survey - ARCHIVED

The Lavallée-Hidiroglou (L-H) method of finding stratification boundaries has been used in the Census Bureau’s Annual Capital Expenditures Survey (ACES) to stratify part of its universe in the pilot study and the subsequent preliminary survey. This iterative method minimizes the sample size while fixing the desired reliability level by constructing appropriate boundary points. However, we encountered two problems in our application. One problem was that different starting boundaries resulted in different ending boundaries. The other problem was that the convergence to locally-optimal boundaries was slow, i.e., the number of iterations was large and convergence was not guaranteed. This paper addresses our difficulties with the L-H method and shows how they were resolved so that this procedure would work well for the ACES. In particular, we describe how contour plots were constructed and used to help illustrate how insignificant these problems were once the L-H method was applied. This paper describes revisions made to the L-H method; revisions that made it a practical method of finding stratification boundaries for ACES.