  The need for small area estimates is increasingly felt in both the public and
private sectors in order to formulate their strategic plans. It is now widely
recognized that direct small area survey estimates are highly unreliable owing
to large standard errors and coefficients of variation. The reason behind this
is that a survey is usually designed to achieve a specified level of accuracy
at a higher level of geography than that of small areas. Lack of additional
resources makes it almost imperative to use the same data to produce small area
estimates. For example, if a survey is designed to estimate per capita income
for a state, the same survey data need to be used to produce similar estimates
for counties, subcounties and census divisions within that state. Thus, by
necessity, small area estimation needs explicit, or at least implicit, use of
models to link these areas. Improved small area estimates are found by
"borrowing strength" from similar neighboring areas.
