Bayesian model comparison and model averaging for small-area estimation

Abstract

This paper considers small-area estimation with lung cancer mortality data, and discusses the choice of upper-level model for the variation over areas. Inference about the random effects for the areas may depend strongly on the choice of this model, but this choice is not a straightforward matter. We give a general methodology for both evaluating the data evidence for different models and averaging over plausible models to give robust area effect distributions. We reanalyze the data of Tsutakawa [Biometrics 41 (1985) 69--79] on lung cancer mortality rates in Missouri cities, and show the differences in conclusions about the city rates from this methodology.Comment: Published in at http://dx.doi.org/10.1214/08-AOAS205 the Annals of Applied Statistics (http://www.imstat.org/aoas/) by the Institute of Mathematical Statistics (http://www.imstat.org