Small Area Estimation Of Turnover Of The Structural Business Survey

Since design-based methods like the generalized regression estimator have large design variances in the case of small sample sizes, model-based techniques can be considered as an alternative. In this paper a simulation study is carried out where small area estimation based on a linear mixed model is applied to the variable turnover of the Structural Business Survey of Statistics Netherlands. By applying the EBLUP, the accuracy of the estimates can be substantially improved compared to the generalized regression estimator. The EBLUP estimates, however, are biased, which is partly caused by the skewed distribution of the variable turnover. It is found that by transforming the target variable both skewness and bias can be substantially reduced, whereas the variance increases. As a result, the accuracy is slightly improved compared to the EBLUP.