endar year (January–December 1996) and those who were asked to report for the past 12 months, covering October 1996–September 1997, November 1996–October 1997, and December 1996–November 1997 (Posey and Welniak, 1998). What factors explain this result—for example, whether respondents tend to annualize their current income or to report income for the previous calendar year regardless of the reporting period—are not known. Carefully designed research will be needed to assess the effects of the ACS reference period on income statistics, such as research that compares an external measure of income from administrative records with survey responses for the same individuals.

3-A.2.c
Inflation Adjustments

For completeness, this section discusses inflation adjustments not only for income, but also for housing amounts. The latter amounts include housing value, monthly contract rent, monthly gross rent (contract rent plus utilities), and monthly selected owners’ housing costs (mortgage payments, utilities, taxes, property insurance).8


Income To put income amounts that are reported for differing 12-month reference periods on a comparable calendar-year basis, the Census Bureau expresses them in constant dollar terms by using the national consumer price index for urban consumers-research series (CPI-U-RS) for the latest calendar year covered by an estimate.9 For 1-year period income estimates for 2005, for example, each reported amount on a person record is adjusted by the ratio of the annual average CPI for 2005 divided by the average of the monthly CPIs for the particular 12-month reporting period for that person. For 3-year period estimates for, say, 2005–2007, the incomes for people sampled in 2005 and 2006 (which have already been adjusted to calendar 2005 or 2006 on a 1-year basis) are adjusted to calendar year 2007 by the ratio of the annual average CPI for 2007 divided by the annual average CPI for 2005 or 2006, as the case may be (see Table 3-1 for how this adjustment is carried out).

8

To create monthly gross rent and selected owners’ housing costs, the amounts reported for some costs for either the prior 12 months or as “annual” amounts—see Table 2-2—are converted to monthly amounts.

9

“The Bureau of Labor Statistics (BLS) has made numerous improvements to the Consumer Price Index (CPI) over the past quarter-century … [but] historical price index series are not adjusted to reflect the improvements. Many researchers … expressed an interest in having a historical series that was measured consistently over the entire period. Accordingly, the Consumer Price Index research series using current methods (CPI-U-RS) presents an estimate of the CPI for all Urban Consumers (CPI-U) from 1978 to present that incorporates most of the improvements made over that time span into the entire series” (http://www.bls.gov/cpi/cpiurstx.htm).



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