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A Comparison of Small Area Estimation Methods for Poverty Mapping

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  • Guadarrama María

    (Department of Statistics, Universidad Carlos III de Madrid. Address: C/Madrid 126, 28903 Getafe (Madrid), Madrid, ; Spain)

  • Molina Isabel

    (Department of Statistics, Universidad Carlos III de Madrid. Madrid, ; Address: C/Madrid 126, 28903 Getafe (Madrid), Spain)

  • Rao J. N. K.

    (School of Mathematics and Statistics, Carleton University, ; Carleton, ; Canada)

Abstract

We review main small area estimation methods for the estimation of general non-linear parameters focusing on FGT family of poverty indicators introduced by Foster, Greer and Thorbecke (1984). In particular, we consider direct estimation, the Fay-Herriot area level model (Fay and Herriot, 1979), the method of Elbers, Lanjouw and Lanjouw (2003) used by the World Bank, the empirical Best/Bayes (EB) method of Molina and Rao (2010) and its extension, the Census EB, and finally the hierarchical Bayes proposal of Molina, Nandram and Rao (2014). We put ourselves in the point of view of a practitioner and discuss, as objectively as possible, the benefits and drawbacks of each method, illustrating some of them through simulation studies.

Suggested Citation

  • Guadarrama María & Molina Isabel & Rao J. N. K., 2016. "A Comparison of Small Area Estimation Methods for Poverty Mapping," Statistics in Transition New Series, Polish Statistical Association, vol. 17(1), pages 41-66, March.
    • Handle: RePEc:vrs:stintr:v:17:y:2016:i:1:p:41-66:n:3
    DOI: 10.21307/stattrans-2016-005
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    References listed on IDEAS

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    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. Molina, Isabel & Rao, J.N.K., 2009. "Small area estimation on poverty indicators," DES - Working Papers. Statistics and Econometrics. WS ws091505, Universidad Carlos III de Madrid. Departamento de Estadística.
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