An assessment of empirical bayes and composite estimators for small areas

摘要

We compare the classes of empirical Bayes and composite estimators of the population means of the districts (small areas) of a country and show that the commonly adopted modelling strategy of searching for a well-fitting random coefficient (two-level) model and using it for estimation of the district-level means can be ineffective. In particular, we show that variables with small district-level variation are not useful as covariates even when they are strong predictors of the target variable.