Comparison of unit level and area level small area estimators

In this paper, we compare the EBLUP and pseudo-EBLUP estimators for small area estimation under the nested error regression model and three area level model-based estimators using the Fay-Herriot model. We conduct a design-based simulation study to compare the model-based estimators for unit level and area level models under informative and non-informative sampling. In particular, we are interested in the confidence interval coverage rate of the unit level and area level estimators. We also compare the estimators if the model has been misspecified. Our simulation results show that estimators based on the unit level model perform better than those based on the area level. The pseudo-EBLUP estimator is the best among unit level and area level estimators.