1985). Poverty status in particular, especially among young children, is a major factor in the allocation of federal funds to states, counties, school districts, and other levels of local government. According to a recent report from the U.S. General Accounting Office (1990), 12 programs allocated more than $7.6 billion in fiscal 1989 on the basis of poverty data collected in the 1980 census. Of this total, education accounted for the largest share: some $4 billion was allocated in federal education funds through the use of census counts of school-age children in poverty.

Given the aging of census-based data over a decade and the possibility of substantial changes in both the specific characteristic under study and the relative standings of counties, cities, and other geographic entities, questions have been raised as to the effectiveness and equity of targeting funding allocations over time on the basis of the decennial census. The lack of up-to-date data with which to gauge changes in the size, composition, and distribution of the needy population between census years often complicates the efforts of program planners and administrators who are charged with carrying out programs to assist those most in need.

This chapter presents, first, a discussion of the needs for more frequent small-area data and past attempts to produce intercensal small-area data. The chapter then reviews current methods for producing small-area data, including an assessment of the major alternative methods. (For a discussion of the idea of a rolling census, see Chapter 4; for a discussion of continuous measurement, see Chapter 6). The third section examines in more detail one major source of information for producing small-area data, the use of administrative records. The final section discusses the use of a geographic reference system and address list for intercensal estimates.1

NEEDS FOR SMALL-AREA DATA

The problem of providing current estimates for small areas is not new. In 1972, for example, the enactment of revenue-sharing legislation called for the distribution of some $6 billion annually to states and local governments, under a formula that required current estimates of population and per capita income, as well as revenue tax effort, for each governmental unit eligible for revenue sharing allocations. Congress has enacted a variety of programs that allocate funds to local jurisdictions on the basis of current population estimates, including countercyclical revenue sharing, Aid to Families with Dependent Children, block grants for housing and related assistance, criminal justice equipment and programs, and employment and training assistance.

In some instances, the data requirements of the legislation were determined without clear understanding of the required data elements, the quality and timeliness of the existing data, or the feasibility of meeting the data requirements. In a very few instances, the data needs could be met fully by existing data; in most



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