for the ACS data, including the allocation of federal funds for programs that support activities in states and localities. A recent study by the Brookings Institution found that, in fiscal 2008, “184 federal domestic assistance programs used ACS-related datasets to help guide the distribution of $416 billion, 29 percent of all federal assistance. ACS-guided grants accounted for $389.2 billion, 69 percent of all federal grant funding” (Reamer, 2010, p. 1).

However, some characteristics of the ACS limit its usefulness for particular applications or levels of detail. Like the census long form, the ACS is a sample survey. Even with the aggregation of data for 5-year estimates, the ACS sample is significantly smaller than the census long-form sample it replaced, and it therefore has considerably larger margins of error in the sample estimates. In addition to smaller sample size, the ACS sample has greater variation because of greater variation in sample weights because of the subsampling of households for field interviews from among those that do not respond to the mail or telephone contacts. Some uncertainty in the ACS estimates is also introduced by the use of postcensal population and housing estimates as controls for the survey over the course of the decade. These estimates are applied at a less detailed level than census controls, and they are indirect estimates rather than a product of a simultaneous census activity (as were the census controls for the long-form sample). However, some of the characteristics of the ACS mitigate these negative aspects. Because of extensive follow-up, the response rates are higher than response rates achieved with the census long form, and because a higher proportion of ACS responses are through the intervention of an interviewer, the overall quality of the responses tends to be higher.

The effects of the larger sampling errors fall most heavily on the data for small areas and small population subgroups. Later this is illustrated in Table 2-2, which shows that standard errors are proportionally largest for the smallest states with regard to the critical data element used in the allocation of Title III funds. The relative lack of precision for smaller states suggests the need to accumulate data for 3-year and 5-year periods, rather than using 1-year estimates, in order to achieve sufficient precision for some data elements, such as English speaking ability. The issues attending the selection of the appropriate ACS period are extensively discussed below.

Background

It is useful to trace some of the significant events in the evolution of the ACS in order to understand the environment that led to tradeoffs that, in turn, set the objectives for this new survey. After the 1990 census, there were growing concerns, shared by some members of Congress, that the long-form questionnaire had response issues that marginalized its utility. In that census, 29 percent of the households that received the long form failed to mail it back, compared with 24 percent of households that received the short form (National Research Council, 2004, p. 100). Some observers thought that this differential contributed to the poorer coverage of the



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