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arXiv · 2609.21987

Integrating Multivariate Adaptive Regression Splines into Small Area Estimation for Nonlinear Poverty Modeling in Java Island

Ajriansyah·Bambang Widjanarko Otok·Sutikno
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Abstract

Small area estimation (SAE) modeling is often used to address the unreliability of estimates in areas with limited survey samples. However, standard SAE models (Fay-Herriot) can only accommodate linear patterns, whereas in real cases, including poverty, many patterns are nonlinear. This study proposes the implementation of a supervised learning model, multivariate adaptive regression splines (MARS), integrated within the SAE framework (MARS-SAE) to address the challenge of unreliable direct estimation, particularly in nonlinear cases. The hyperparameter tuning results yielded the best model with the following hyperparameter combinations: maximum basis function (Max BF) = 10, maximum interaction (MI) = 2, minimum observation (MO) = 1, penalty = 3, with general cross validation (GCV) = 6.128. MARS-SAE demonstrated very strong performance; empirically, the model proved more efficient at reducing estimation error due to its higher relative efficiency (RE) compared to the SAE Fay-Herriot model, as well as better reduction of relative standard error (RSE) than the comparison model, and it yielded a lower relative root mean squared error (RRMSE) compared to the SAE Fay-Herriot model (13.64% vs. 13.75%). MARS-SAE has been proven to capture nonlinear patterns very well while still maintaining interpretability, making it an effective tool for the predictive and diagnostic analyses of phenomena. Thus, this research can serve as an important reference for readers regionally and in Southeast Asia, given that Java Island is a strategic region for Indonesia, the largest economic power in the ASEAN region.

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Ajriansyah, Bambang Widjanarko Otok, Sutikno. 2026-09-18. Integrating Multivariate Adaptive Regression Splines into Small Area Estimation for Nonlinear Poverty Modeling in Java Island. https://arxiv.org/abs/2609.21987

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