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Description of Income and Poverty Data Sources

The Census Bureau reports income and poverty estimates from several major national household surveys and programs:

• Annual Social and Economic Supplement to the Current Population Survey (CPS ASEC)
• American Community Survey (ACS)
• Survey of Income and Program Participation (SIPP)
• Census 2000 Long Form
• Small Area Income and Poverty Estimates program (SAIPE)

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 data from a variety of sources, to create statistical models to produce income and poverty estimates. It is important to understand that different surveys and methods, which are designed to meet different needs, may produce different results. This document is intended to assist data users in selecting the data source most appropriate for their application.

HIGHLIGHTS
Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS) CPS homepage
Because of its detailed questionnaire, the CPS ASEC is the 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 time series beginning in 1959 at the national level and can also be used to look at state-level trends and differences (through multi-year averages) going back to1980. 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 in 2006, the ACS releases 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 is about three million addresses per year, making the ACS exceptionally useful for subnational analyses. Three-year averages will be 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. Time series trend data will be available for all geographic areas, and for small population subgroups, beginning with the 2006 ACS for geographic areas with population of 65,000 or more. (Background on ACS)

Survey of Income and Program Participation (SIPP) SIPP homepage
The SIPP is most useful for understanding the dynamics of income and poverty (changes in income and poverty rates for the same households over three or four years) and for examing the nature and frequency of poverty spells.  The SIPP also permits researchers to look at monthly or quarterly changes in income and poverty.(Background on SIPP)

Census Long Form
The best measure of change between 1990 and 2000 for subnational areas and for subpopulations are the comparisons of Census 2000 long form estimates 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.  Starting in 2006, 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)

BACKGROUND
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 Nutritional Assistance (formerly known as the food stamp program) and housing assistance.

The American Community Survey (ACS), has 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. The ACS housing unit sample is about three million addresses annually. 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 2005 were asked about income received in the January to December 2004 period, and those interviewed in December 2005 were asked about the December 2004 to November 2005 period.

There are many differences between the ACS and the CPS ASEC.  Some of the most significant are:

• The ACS uses an up-to-date sampling frame (the Census Bureau's Master Address File updated by using the U.S. Postal Service's Delivery Sequence File and targeted address canvassing) while the CPS ASEC uses the Census 2000 sampling frame (updated with new construction since April 2000).
• The income questions in the CPS ASEC are much more detailed than those in the ACS – asking about 50  types of income vs. 8 types of income in the ACS.
• The reference period for income questions differs for ACS income estimates from those from the CPS ASEC and Census 2000, as the latter two use the previous calendar year while the ACS questions ask about income in the previous twelve months.
• The ACS data collection methodology is substantially different from the CPS ASEC, as the CPS ASEC is conducted by interviewers via CATI or CAPI. The ACS, in contrast, uses a self-response mail-out/mail-back questionnaire with CATI or CAPI follow-up.
• The ACS (for the years starting with 2006) includes both institutional and noninstitutional groups quarters in its sampling frame while the CPS ASEC includes only noninstitutional group quarters.¹

For more detailed description of the differences between the ACS and the CPS ASEC, see  Fact Sheet on differences between CPS ASEC and ACS.

Data on income and poverty 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 four months apart over a three- or four-year period and asks a set of "core" questions about the previous four 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 three- or four-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 to the questionnaire used by the ACS (asking about eight income types). However, Census 2000 used only personal-visit follow-up with a  paper questionnaire while the ACS uses CATI, CAPI, and other methods to improve data quality. The Census 2000 long form asked questions about income in calendar year 1999 and therefore poverty estimates are for 1999.  Until the ACS census tract level estimates are released in 2010, the Census 2000 is the only available source of data for small geographies.  For larger geographic areas, ACS estimates can be compared to Census 2000 long form estimates to examine changes in poverty levels and rates over time.

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 American Community Survey are used in the estimation procedure; all prior year estimates used data from the Annual Social and Economic Supplements of the Current Population Survey. Estimates are produced annually.

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, administrative records, and personal income data generated by the Bureau of Economic Analysis. Although used for critical purposes, such as in the funding formula that is used to distribute over $14 billion dollars a year to school districts under the Department of Education's Title I Program, SAIPE provides county and school district level poverty estimates for the entire population, all children, and all school age children.  At the state level, SAIPE also provides estimates of poverty for children under five years of age.  Unlike the household surveys, SAIPE does not allow analysis of how income varies along with other household and individual characteristics, such as nativity and work experience.

SUMMARY
The CPS ASEC provides the most timely and accurate national data on income and is the official source of national poverty estimates, hence it is the preferred source for national analysis. Because of its large sample size, the ACS is preferred for subnational data on income and poverty by detailed demographic characteristics. The Census Bureau recommends using the ACS for single-year estimates of income and poverty at the state level.  Users looking for consistent, state-level trends before 2006 should use the CPS ASEC.

For substate areas, like counties, users should consider their specific needs when picking the appropriate data source.  The SAIPE program produces overall poverty and household income single-year estimates with standard errors usually smaller than direct survey estimates. Users looking to compare estimates of the number and percentage of people in poverty for counties or school districts or the median household income for counties should use SAIPE, especially if the population is less than 65,000. Users who need other characteristics such as poverty among Hispanics or median earnings, should use the ACS, where and when available.

The SIPP is the only source of longitudinal poverty, income and program participation data. It provides national estimates and estimates for some larger states. Its timeliness is not comparable to the other surveys since one must wait until after a three- or four-year panel has concluded to analyze the longitudinal data.

The chart below summarizes the recommendations at various geographic levels:

¹ Prior to 2006, the ACS sampling frame excluded all group quarters, slightly affecting the estimates of poverty, as some people in the poverty universe are in noninstitutional group quarters, such as those in group homes and shelters. The exclusion of group quarters in the pre-2006 ACS sampling frames limits the comparability of 2001-2005 ACS data to the CPS ASEC estimates, Census 2000 estimates and post-2005 ACS estimates.

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Page Last Modified: November 13, 2009