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Policy-related small.area estimation

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  • LONGFORD Nicholas Tibor
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    Abstract

    A method of small-area estimation with a utility function is developed. The utility characterises a policy planned to be implemented in each area, based on the area?s estimate of a key quantity. It is shown that the commonly applied empirical Bayes and composite estimators are inefficient for a wide range of utility functions. Adaptations for limited budget to implement the policy are explored. An argument is presented for a closer integration of estimation and (regional) policy making.

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    Bibliographic Info

    Paper provided by CEPS/INSTEAD in its series CEPS/INSTEAD Working Paper Series with number 2011-44.

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    Length: 36 pages
    Date of creation: Jul 2011
    Date of revision:
    Handle: RePEc:irs:cepswp:2011-44

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    Related research

    Keywords: Composition; empirical Bayes; expected loss; borrowing strenght; exploiting similarity; small-area estimation; utility function;

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    1. Longford, Nicholas T., 2010. "Bayesian Decision Making About Small Binomial Rates With Uncertainty About the Prior," The American Statistician, American Statistical Association, vol. 64(2), pages 164-169.
    2. Peter Hall & Tapabrata Maiti, 2006. "On parametric bootstrap methods for small area prediction," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 68(2), pages 221-238.
    3. Garthwaite, Paul H. & Kadane, Joseph B. & O'Hagan, Anthony, 2005. "Statistical Methods for Eliciting Probability Distributions," Journal of the American Statistical Association, American Statistical Association, vol. 100, pages 680-701, June.
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