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Using the American Community Survey: Benefits and Challenges
(when they become available) for counties with 65,000 to 200,000 people, and 5-year period estimates (when they become available) for the remaining three-fourths of counties. This strategy is conservative with regard to sampling error. A reason to be conservative is that HUD is concerned not only with having estimates that are as up-to-date as possible, but also with reducing year-to-year fluctuations in median family income estimates that are due to sampling error.
The previous discussion of using ACS estimates in fund allocation formulas concluded that estimates for different periods should not be used in the same formula because the resulting fund allocations could be inequitable. The HUD use of median income estimates, however, is different in that HUD is not allocating shares of a fixed budget allotment; instead, it is determining an eligibility threshold for an entitlement. Families living in a metropolitan area or a nonmetropolitan county that have incomes below a specified percentage of the median income for that area are entitled to subsidized housing, and the median income levels in other areas are not relevant to this determination. (In practice, entitled families may be put on a waiting list because not enough housing is available.) Given that housing assistance is allocated to individual families on the basis of their incomes as a percentage of the median for their area, it makes sense to use the estimate for each metropolitan area or nonmetropolitan county that has an acceptable level of sampling error and is as up-to-date as possible.
3-A.2.b Moving Reference Periods
Because the ACS is conducted on a continuous monthly basis, the questionnaire items change in their reference period across the year. Many questions (see Table 2-2) refer to the time when the respondent fills out the questionnaire, which could be any date from January to December of a calendar year. Questions on income ask for amounts received in the 12 months prior to when the respondent fills out the questionnaire. Consequently, the ACS 1-year period income estimates will include reference periods that span a full 23 months: for 2005 income estimates, for example, the reference periods range from January–December 2004 for people who responded in January 2005 to December 2004–November 2005 for people who responded in December 2005.
There has been little research on the effects on accuracy of reporting income amounts with a moving reference period of the past 12 months compared with the fixed reference period of the previous calendar year that is used in the long-form sample and the CPS ASEC. A split-sample experiment with mail responses to the ACS questionnaire in October–December 1997 produced the unexpected result of no significant differences in median total income of individuals who were asked to report for the preceding cal-