Small Area Estimation Using a Reweighting Algorithm

Summary The paper describes a method of small area estimation which uses a reweighting algorithm to reweight survey data to a number of known totals (benchmarks) for small areas. The method has so far been used to estimate small area poverty rates and housing stress. The method gives poverty rates for small areas that are similar to those available from the 2006 Australian census, when the same definition of poverty was used. Various methods of validating the poverty rates have been used, including aggregating the poverty rates to a larger area and comparing them with official Australian Bureau of Statistics estimates from a survey, and applying the spatial microsimulation to larger areas and comparing with official Australian Bureau of Statistics survey results. Both these tests show that the estimates are comparable and fairly robust for most states in Australia.