R Package Development for Difference Benchmarking in Small Area Estimation Fay-Herriot Model

Abstract

In recent decades, the use of small area estimation (SAE) for producing official statistics has been widely recognized by many National Statistics Offices including BPS-Statistics Indonesia. For official statistics usage, the aggregation of small area estimates is expected to be numerically consistent and more efficient than the aggregation of the unbiased direct estimates that cannot be guaranteed by Fay-Herriot model. Simulation experiments are performed to assess the behaviour of the difference benchmarking method Fay-Herriot model and to compare the mean squared error (MSE). The result shows that the difference benchmarking method can produce a consistent aggregation towards the direct estimation. Furthermore, an R package was built to implement the method that is easier to be used and is already available in the CRAN website. The package has been evaluated using validity (simulation), performance, case studies, and usability tests. These evaluations show that the package is suitable for use. Implementation of the methodology is also be applied to estimate average household consumption per capita expenditure in districts in D.I. Yogyakarta province, Indonesia 2019