Estimation of average income in Cuban municipalities

This article asserts that diversification to produce small area statistics for different fields in Cuban society should be a priority for the National Statistics Office. The key question about small area estimation is how to obtain reliable local statistics when the sample data contain too few observations for statistical inference of adequate precision. The social research presented here is focused on finding small area estimates which are more precise than the direct estimates of monthly mean income for people aged 15 and over at a municipal level. In this case, all 169 Cuban municipalities are considered small areas of interest. The empirical results obtained from this application are only intended to provide a first impression of the usefulness of applying small area estimation methods in Cuba. This study yields more precise estimates than the direct estimates for small areas/domains, even though in Cuba, as in any other developing country, the search for suitable auxiliary variables is used to “borrow strength” from neighbouring areas or domains may frequently be an important limitation.