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Using the American Community Survey: Benefits and Challenges
the purpose of the adjustment. Assuming that users largely prefer an inflation adjustment to the latest year of the period, then the question becomes one of the specific method(s) to use. Another issue is how to assist users who require current-year estimates rather than averages expressed in latest-year dollars.
3-A.2.d Alternative Sources of Median Income Estimates
Abstracting from the previous discussion, there are at least three possible approaches for HUD (and other users) to obtain median family income estimates for the previous calendar year that are reasonably precise for all counties:
As suggested by ORC Macro (2002:162–171), HUD could ask the Census Bureau to produce 1-year period ACS median family income estimates for combinations of small counties to accompany the estimates that are published for larger counties. (If PUMA combinations of counties are suitable, then HUD could use the 1-year period estimates that will be regularly produced for PUMAs.)
HUD could plan to use the SAIPE model-based median household income estimates for all counties once the model is modified to incorporate information from the ACS. A drawback of the SAIPE estimates is the 2-year lag between release and the calendar year reference period of the estimates. Also, at present the SAIPE estimates represent a 3-year average, but this may change if the ACS is used as the dependent variable in the model equations in place of the CPS ASEC. An advantage of model-based estimates is that they exhibit less variability in precision across areas than direct estimates (see Bell, 2006, for comparisons for states).
HUD could decide to use ACS 3-year or 5-year period estimates for counties and ask the Census Bureau to develop an alternative method for adjusting income responses in the ACS to reflect HUD’s need for current-year estimates. For example, appropriate year-to-year ratios of the BLS wage data for counties could be applied to the ACS 3-year or 5-year household income estimates, not adjusted for inflation, to produce current-year median income estimates.
3-B STATE AGENCY USES
State governments have many uses of census long-form-sample data for program planning, implementation, and evaluation that are similar to those of federal government agencies (see Section A above). They also have many