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Census money income is defined as income received on a regular basis (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, medicare deductions, etc. Therefore, money income does not reflect the fact that some families receive part of their income in the form of noncash benefits, such as food stamps, health benefits, subsidized housing, and goods produced and consumed on the farm. In addition, money income does not reflect the fact that noncash benefits are also received by some nonfarm residents which may take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. Data users should consider these elements when comparing income levels. Moreover, users should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. Based on an analysis of independently derived income estimates, the Census Bureau determined that respondents report income earned from wages or salaries much better than other sources of income and that the reported wage and salary income is nearly equal to independent estimates of aggregate income.
Census also derives alternative income measures that systematically remove or add various income components such as deducting payroll taxes and federal and state income taxes and including the value of specific noncash benefits, food stamps, school lunches, housing subsidies, health insurance programs, and return on home equity. These alternative measures are derived from information collected in Census surveys along with information from other agencies such as the Centers for Medicare and Medicaid Services (CMS), the U.S. Bureau of Labor Statistics, the U.S. Department of Agriculture, the U.S. Internal Revenue Service, and the U.S. Office of Personnel Management (OPM).
Sources of Census Income
The Census Bureau collects income data from several surveys. Depending on your needs, one survey may be more suitable than another. The following is a list of Census Bureau surveys:
Each of these surveys differs from the others in some ways, such as the length and detail of its questionnaire, the number of households included (sample size), and the methodology used to collect and process the data. The Small Area Income and Poverty Estimates program uses statistical models to produce income and poverty estimates by combining survey results with administrative records.
As a result of this multiplicity of sources, it is important to understand that different surveys and methods, which are designed to meet different needs, also produce different results. We have provided this guidance to assist data users in selecting the data source most appropriate for their application.
Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS) CPS homepage
Because of its detailed questionnaire, the CPS ASEC is the primary source of timely official national estimates of poverty levels and rates and of widely used estimates of household income and individual earnings, as well as the distribution of that income.
The CPS ASEC provides a consistent historical income time series, beginning in 1946, at the national level, and can also be used to look at state-level trends and differences (through multi-year averages) going back to 1984. However, the relatively large sampling errors of state-level estimates for smaller states somewhat limit their usefulness. (Background on CPS ASEC)
American Community Survey (ACS) ACS homepage
Starting with 2000, the ACS provides subnational estimates of income and poverty for the nation, states, and places, counties, and metropolitan areas with a population of at least 250,000. The sample size of this survey from 2000 to 2004 was about 800,000 addresses per year.
In 2006, the ACS began releasing annual subnational estimates of income and poverty for all places, counties, and metropolitan areas with a population of at least 65,000 as well as the nation and the states. The sample size of this survey increased to about three million addresses per year, making the ACS exceptionally useful for subnational analyses. Three-year averages are available starting in 2008 for areas and subpopulations as small as 20,000. Five-year averages will be available for census tracts/block groups and for small subgroups of the population starting in 2010. All ACS estimates will be updated every year after they are first available. Because of its large sample size, estimates from the fully implemented ACS provide the best survey-based state level income and poverty estimates. (Background on ACS) The ACS estimates have a different reference period than the CPS ASEC and a different population universe.
Survey of Income and Program Participation (SIPP) SIPP homepage
The SIPP is useful mainly for understanding changes for the same households in income and poverty, that is the dynamics of income and poverty, over time (up to 3 or 4 years), and for examining the nature and frequency of poverty spells. The SIPP also permits researchers to look at monthly or quarterly changes in income and poverty and periods of income receipt of less than a year. (Background on SIPP)
Census 2000 long form
The best measure of change between 1990 and 2000 for subnational areas, even small places, and for subpopulations, are the comparisons of Census 2000 results with those from the 1990 Census long form. Since the ACS replaces the long form, the 2010 census will not include a long form and will not provide income and poverty estimates. ACS estimates can be compared to Census 1990 and Census 2000 estimates. When released in 2010, ACS five-year estimates for small areas will provide data at the census track level which will be comparable to earlier decennial census estimates. (Background on Census 2000 long form)
Small Area Income and Poverty Estimates (SAIPE) program SAIPE homepage
The SAIPE program produces single-year estimates of median household income and poverty for states and all counties, as well as population and poverty estimates for school districts. Since SAIPE estimates combine ACS data with administrative and other data, SAIPE estimates generally have lower variance than ACS estimates but are released later because they incorporate ACS data in the models. For counties and school districts, particularly those with populations below 65,000, the SAIPE program provides the most accurate subnational estimates of poverty. For counties, SAIPE generally provides the best single year estimates of median household income. (Background on SAIPE)
The Annual Social and Economic Supplement to the Current Population Survey (CPS ASEC) is designed to give annual, calendar-year, national estimates of income and official poverty numbers and rates. It is, nonetheless, used for many other purposes, including the allocation of federal funding.
The CPS is primarily a labor force survey, not an income survey, and is conducted every month by the Census Bureau for the Bureau of Labor Statistics using Computer-Assisted Telephone Interviewing (CATI) and Computer-Assisted Personal Interviewing (CAPI). The Basic CPS is used to calculate the monthly unemployment rate estimates. Supplements are added in most months; the ASEC is conducted in February, March, and April with a sample of about 100,000 addresses per year. The questionnaire asks about income from more than 50 sources and records up to 27 different income amounts, including receipt of numerous noncash benefits, such as Supplemental Nutrition Assistance (formerly known as the food stamp program), subsidized school lunches, and housing assistance.
The American Community Survey (ACS), replaced the decennial census long-form sample questionnaire. The ACS offers broad, comprehensive information on social, economic, and housing data and is designed to provide this information at many levels of geography. During the 2000-2004 testing program, the ACS collected income data for a much larger sample than the CPS ASEC (about 800,000 addresses per year). Beginning in 2005, the ACS sample size grew to about 3 million addresses. As with the decennial census long form, the ACS relies heavily on questionnaire responses mailed in by respondents. These estimates are collected on a rolling basis every month throughout the year, and the questionnaire asks about eight types of income received in the previous 12 months. For example, those interviewed in January 2010 were asked about income received in the January to December 2009 period, and those interviewed in December 2009 were asked about the December 2008 to November 2009 period.
There are many differences between the ACS and the CPS ASEC. Some of the most significant are:
Data on income are also released periodically from the Survey of Income and Program Participation (SIPP), a longitudinal survey designed to track changes in income over time for the same households. Whereas the CPS ASEC is a labor force survey with supplementary questions on income, the SIPP focuses on income and typically reports more income (and therefore lower poverty) than the CPS ASEC. The SIPP consists of 9 or 12 interviews spaced 4 months apart over a 3- or 4-year period and asks a set of "core" questions about the previous 4 months by telephone and personal visit. Interviewers return to the same household (not housing unit) and attempt to follow each individual interviewed in the first series of interviews, even if they move. About 62,000 addresses were in the initial sample for the 2004 SIPP.
The SIPP is useful mainly for examining the changes in income (and poverty) for particular households and individuals over a 3- or 4-year period or for time periods shorter than a year, since it collects monthly income by source using a much more detailed questionnaire than the CPS ASEC - up to 81 sources of income and up to 73 individual income values.
The SIPP also contains information on many other subject areas that are critical for understanding social and economic well-being. These areas include wealth, disability status, health insurance coverage, child support, pension coverage, and measures of material well-being. The richness of this survey, coupled with its collection of high-quality income data, make the SIPP a unique and extremely valuable federal survey. Its estimates have been used to understand the relationship between job loss and health insurance coverage, to understand the employment of former welfare recipients, to estimate housing affordability, to understand the economic well-being of the disabled, and in many other policy-relevant analyses.
The Census 2000 long form used a mail-out/mail-back questionnaire that was very similar that used by the ACS (asking about eight income types). However, Census 2000 used only personal-visit follow-up using paper questionnaires while the ACS uses CATI, CAPI, and other methods to improve data quality. The estimates from Census 2000 are becoming more and more outdated as time passes, but that is all that is available for census tracts until ACS results are available in 2010.
The Small Area Income and Poverty Estimates (SAIPE) program was created by the U.S. Census Bureau, with support from other Federal agencies, to provide estimates of selected income and poverty statistics for states, counties, and school districts. The main objective of this program is to provide updated estimates of income and poverty statistics for the administration of federal programs and the allocation of federal funds to local jurisdictions. Beginning with the estimates for 2005, data from the ACS are used in the estimation procedure; all prior year estimates used data from the CPS ASEC. Estimates are produced annually.
The SAIPE program "borrows strength" from multiple data sources, including administrative records and multiple household surveys, to produce estimates with lower variance than estimates from any one source, but they are available a year later than the annual estimates from the CPS ASEC. The SAIPE program uses statistical methods to improve subnational estimates of income and poverty by using information from a variety of sources, including current surveys, population estimates, and administrative records such as aggregate food stamps and aggregate adjusted gross income from tax returns. Although used for critical purposes, such as in the funding formula that is used to distribute about $14 billion dollars a year to school districts under the Department of Education's Title I Program, such information is provided only as a characteristics of a specific geographic area. A significant advantage of household surveys is their ability to allow analysis of how income varies along with other household and individual characteristics, such as nativity and work experience.