Small Area Income and Poverty Estimates

Annual Social and Economic Supplement (ASEC) of the Current Population Survey (CPS)

Prior to the SAIPE 2005 estimates, all previous years' estimates were created using data from the Annual Social and Economic Supplement (ASEC) of the Current Population Survey (CPS), which is the source of timely official national estimates of poverty levels and rates and of widely used measures of income. It provides annual estimates based on a survey of more than 75,000 households. The survey contains detailed questions covering social and economic characteristics of each person who is a household member as of the interview date. Income questions refer to income received during the previous calendar year. These questions measure the level of family income and household composition from which we determine poverty status. For example, the survey conducted in March 2002 was combined with information on household characteristics as of that date with reports of income in the preceding year to produce estimates of 2001 income and poverty.

Poverty is determined by comparing the total income of the family to poverty thresholds for that size family. The thresholds account for annual changes in the Consumer Price Index. You can view the current poverty thresholds and discussion of poverty and its measurement under Poverty at the U.S. Census Bureau's web site.

The CPS ASEC sample does not include observations for most counties. The sample design provides consistent national-level estimates, but consideration is also given to providing reliable annual state-level estimates of unemployment. Of the more than 3,100 counties in the country, about 1,300 counties are in the sample.

To use the CPS ASEC data at the county level, we needed to adjust the sample "weights" (the number of people represented by each sample person). In the CPS ASEC design, some counties represent a group of counties, while others represent only themselves. For our purposes, each county must represent itself.

We derive inputs for the models from the CPS ASEC data by computing the key statistics for each state and each of the counties in the sample. In order to reduce the sampling variability of the CPS ASEC estimates for each county, we computed three-year weighted averages centered on the target estimation year, rather than basing the estimate on data about the target year alone. Any bias resulting from the inclusion of the data for adjacent years was felt to be less important than the reduction in variance gained by including data from the additional years. For example, to obtain the observations for the 1993 models, we averaged estimates for 1992, 1993, and 1994 obtained from the March 1993, March 1994, and March 1995 CPS surveys. State models, however, use only data from the target year (data from the March 1994 survey for income year 1993).

Further information about the characteristics of the CPS and the ASEC can be found on the CPS Homepage.