Title: Small area estimation of inequality measures under alternative distribution models
Authors: Maria Rosaria Ferrante - University of Bologna (Italy)
Silvia Pacei - University of Bologna (Italy) [presenting]
Abstract: Small area statistics on economic inequality are becoming important for better planning public regional policies. We focus on the estimation of entropy inequality measures in Italian provinces by using data taken from the EU-SILC sample survey for Italy. As EU-SILC survey is planned to provide reliable estimates for areas that are larger than those we are interested in, the number of units sampled at provincial level is generally too small to obtain reliable estimates, and the use of small area estimation models is advisable. We consider small area models specified at area level that include the direct survey weighted estimators. In these models direct estimators are assumed to be unbiasedness and normally distributed. Due to the range of values that these estimators can assume and to the possible asymmetry of their distribution, the normality assumption could be inadequate in small samples. Therefore, more flexible distributions are compared and explored as alternative to the normal one. Moreover, inequality direct estimators are known to be biased for small sample sizes. A correction that can produce approximately unbiased direct estimators, taking into account the complexity of the survey design, is also proposed.