the preferred weighting scheme for 3-year estimation may be different from that for 5-year estimation because of the difference in sample sizes.
The Census Bureau has recently begun research into the introduction of an additional step in the weighting procedure based on linking administrative data to housing units on the MAF. This step, which involves a calibration weighting adjustment applied just to the linked units, can be applied at the tract level (Fay, 2005, 2006). The initial goal of this research was to improve the precision of 5-year estimates for tracts, but, if successful, it could improve the precision of estimates for subcounty areas more generally. Elsewhere in this report the panel has pointed out the need to improve the precision of ACS estimates for small geographical areas. Thus, this line of research warrants further investigation.
Recommendation 6-1: The Census Bureau should conduct research to examine the bias and variance properties of the planned multiyear weighting scheme and compare these properties with those of some alternative schemes.
The production of estimates every year, rather than every 10 years as with the decennial census long-form sample, is a major asset of the ACS. Users will be able to study changes in estimates over the years. For areas for which 1-year estimates are provided, users will have a time series of 1-year estimates from which annual, biannual, and other changes are easily obtained, and to which more sophisticated methods of time series analysis can be applied. The Census Bureau will also provide margins of error for changes from one year to the next. With areas for which only multiyear period estimates are produced, the study of change over time is more complicated.
There are two main questions to be addressed in assessing changes in multiyear period estimates over time: (1) How is the change between two multiyear estimates to be interpreted (that is, what is the estimand)? (2) What is the precision of the estimated change? Two simplifying assumptions help to convey the essential points to be made in answering these questions. One is that each multiyear estimate for an area is a simple average of its 1-year estimates. This assumption is approximately valid for areas with populations that change little over time. The second assumption is that the precision of the 1-year estimates remains the same over time. Given the first assumption, the second assumption is a reasonable approximation, even though, when estimating a proportion (for example, the proportion poor), the magnitude of an estimate’s sample error depends on the value of the proportion.