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 by simulations that the
commonly applied composite and empirical Bayes estimators are inefficient for
a wide range of asymmetric utility functions. Adaptations for limited budget
to implement the policy are explored. An argument is presented for a closer
integration of estimation and (regional) ...
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 by simulations that the
commonly applied composite and empirical Bayes estimators are inefficient for
a wide range of asymmetric 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 because no single small-
area estimator is suitable for a wide range of purposes.
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