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Current versus Constant (or Real) Dollars

To accurately compare income over time, users should adjust summary measures (medians, means, etc.) for changes in cost of living (prices).

To adjust historical income estimates for inflation, the U.S. Census Bureau uses price series produced by the Bureau of Labor Statistics (BLS). 

Adjustment in the CPS ASEC

For its official historical income series based on the Current Population Survey Annual Social and Economic Supplement (CPS ASEC), the Census Bureau uses the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) to adjust income estimates from 2000 onward. Between 1978 and 1999, the Census Bureau uses the Consumer Price Index for All Urban Consumers Retroactive Series (R-CPI-U-RS). For 1967 to 1977, the Census Bureau uses estimates provided by BLS from the CPI-U-X1 series. The CPI-U-X1 is an experimental series that preceded the R-CPI-U-RS and estimates the inflation rate in the CPI-U when applying the current rental equivalence method of measuring the cost of homeownership for years prior to 1983. The Census Bureau derived the R-CPI-U-RS for years before 1967 by applying the 1967 R-CPI-U-RS-to-CPI-U ratio to the 1947 to 1966 CPI-U.

Census uses estimates of annual inflation from these measures to produce a single price series, which is then applied to historical income estimates from the CPS ASEC. Users can access this price series from the file linked below.  

Adjustment in the ACS

To inflation adjust prior year and historical income estimates from the American Community Survey (ACS), the Census Bureau continues to use the R-CPI-U-RS for all years. Users can access the R-CPI-U-RS price series on BLS’s website located at:

R-CPI-U-RS Homepage : U.S. Bureau of Labor Statistics (bls.gov)



To inflation adjust an income estimate from 1995 dollars to 2022 dollars, multiply the 1995 estimate by the annual index value from 2022 (163.9) divided by the annual index value from 1995 (90.9).


Inflation-adjusted estimate = 1995 estimate * (2022 index value / 1995 index value)

                                              = 1995 estimate * (163.9 / 90.9)


Glossary of Terms

Current dollars is a term describing income in the year in which a person, household, or family receives it. For example, the income someone received in 1989 unadjusted for inflation is in current dollars.

Constant or real dollars are terms describing income after adjustment for inflation. The Dictionary of Business and Economics defines constant dollar values and real income as shown below.

Constant-dollar value (also called real-dollar value) is a value expressed in dollars adjusted for purchasing power. Constant-dollar values represent an effort to remove the effects of price changes from statistical series reported in dollar terms. The result is a series as it would presumably exist if prices were the same throughout as they were in the base year-in other words, as if the dollar had constant purchasing power.

Real income. The purchasing power of the income of an individual, group, or nation, computed by adjusting money income to price changes. A comparison between incomes earned during 1970 and 1980, for example, would be pointless unless 1970 and 1980 price levels were identical. Using a price index showing, for example, that average consumer prices increased by 50 percent between those years, it becomes clear that $1,000 in 1980 bought what $667 bought in 1970. Thus, even if total income actually doubled, real income would double only if prices remained constant.

Page Last Revised - September 12, 2023
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