Small area estimation of poverty proportions under random regression coefficient models

In this paper a random regression coefficient model is used to provide estimates of small area poverty proportions. As poverty variable is dichotomic at the individual level, the sample data from Spanish Living Conditions Survey is previously aggregated to the level of census sections. EBLUP estimates based on the proposed model are obtained. A closed-formula procedure to estimate the mean squared error of the EBLUP estimators is given and empirically studied. Results of several simulations studies are reported as well as an application to real data.