Chandra, Hukum and Chambers, R., Multipurpose Small Area Estimation, Centre for Statistical and Survey Methodology, University of Wollongong, Working Paper 06-08, 2008, 23p.
Sample surveys are generally multivariate, in the sense that they collect data on more than one response variable. In theory, each variable can then be assigned an optimal weight for estimation purposes. However, it is a distinct practical advantage to have a single weight for all variables collected in the survey. This paper describes how such multipurpose sample weights can be constructed when small area estimates of the survey variables are required. The approach is based on the model-based direct (MBD) method of small area estimation described in Chambers and Chandra (2006). Empirical results reported in this paper show that MBD estimators for small areas based on multipurpose weights perform well across a range of variables that are often of interest in business surveys. Furthermore, these results show that the proposed approach is robust to model misspecification and also efficient when used with variables that are not suited to standard methods of small area estimation (e.g. variables that contain a significant proportion of zeros).