Use of Inequality Constrained Least Squares Estimation in Small Area Estimation

Traditional surveys provide estimates that are based only on the sample observations collected for the population characteristic of interest. However, these estimates may have unacceptably large variance for certain domains. Small Area Estimation (SAE) deals with determining precise and accurate estimates for population characteristics of interest for such domains. SAE usually uses least squares or maximum likelihood procedures incorporating prior information and current survey data. Many available methods in SAE use constraints in equality form. However there are practical situations where certain inequality restrictions on model parameters are more realistic. It will lead to Inequality Constrained Least Squares (ICLS) estimates if the method used is least squares. In this study ICLS estimation procedure is applied to many proposed small area estimates.