Transforming response values in small area prediction

Abstract

In real applications of small area estimation, one often encounters data with positive response values. The use of a parametric transformation for positive response values in the Fay-Herriot model is proposed for such a case. An asymptotically unbiased small area predictor is derived and a second-order unbiased estimator of the mean squared error is established using the parametric bootstrap. Through simulation studies, a finite sample performance of the proposed predictor and the MSE estimator is investigated. The methodology is also successfully applied to Japanese survey data.

24 pages; To appear in Computational Statistics & Data Analysis

References in corpus (4)

• New Important Developments in Small Area Estimation
• Parametric bootstrap approximation to the distribution of EBLUP and related prediction intervals in linear mixed models
• A second-order efficient empirical Bayes confidence interval
• Parametric Transformed Fay-Herriot Model for Small Area Estimation