A Practical Guide for the Computation of Domain-Level Estimates with the Socio-Economic Panel (and Other Household Surveys)

SOEPpapers 1055, 11 S.

Natascha Hainbach, Christoph Halbmeier, Timo Schmid, Carsten Schröder


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There is a huge interest in deriving and comparing socio-economic indicators across societal groups and domains. The indicators are usually derived from population surveys like the German Socio-Economic Panel (SOEP) by direct estimation. Small sample sizes in the domains can limit the precision of these estimates. For example, while SOEP may be a suitable database for determining mean income in Germany, it is unclear whether this also applies to smaller domains (for example, women in Berlin). Here we show SOEP-based applications of Stata’s fayherriot package (Halbmeier et al., 2019). This package implements the Fay-Herriot model (Fay and Herriot, 1979), a small-area estimation technique designed to improve the precision of domain-level direct estimates using domain-level covariates from auxiliary datasets.

Carsten Schröder

Vize-Direktor SOEP und Bereichsleitung Angewandte Panelanalysen in the German Socio-Economic Panel study Department

JEL-Classification: C13;C31;C51;C87
Keywords: Disaggregated indicators, Small area estimation, Fay-Herriot model, Socio-Economic Panel