Synthetic estimates for small areas: Statistical Workshop papers and discussion.

Methods for obtaining small area estimates which have emerged over the past decade are reviewed with particular emphasis given to synthetic estimation, a procedure originally developed at the National Center for Health Statistics which has found wide acceptance because of its simplicity and intuitive appeal, and yet has provoked much controversy because of its lack of good demonstrable statistical properties and its equivocal results when subjected to empirical evaluation. The various methods of obtaining small area estimates are discussed in terms of their statistical properties, the feasibility of using them and the potential scope of their application. Finally, some recommendations are made concerning possible avenues of future research in small area estimation, and some tentative guidelines are given for choosing between alternative existing methods. INTRODUCTION It has now been ten years since the National Center for Health Statistics (NCHS) published estimates for each State in the United States of restricted activity days, bed disability days and other selected variables from the Health Interview Survey (HIS) and, in so doing, introduced in published form the concept of synthetic estimation [National Center for Health Statistics. 1968). At the time, this represented a radical departure from NCHS policy of publishing only estimates known to be for all practical purposes unbiased and for which sampling errors can be estimated. It was immediately recognized that the importance of this publication lay not in its HIS subject matter, but in its presentation at a period of time in which local, State, and regional planning were emerging as important issues, of an easily usable, inexpensive and intuitively appealing method of obtaining exactly the kind of small area estimates that were so sorely needed. At the same time, it was recognized that synthetic estimation is a crude method and that much further work was needed, especially in evaluation of this