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What Are Model-Based Estimates and Why Does the Census Bureau Produce Them?

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Today the Census Bureau released its 2012 Small Area Income and Poverty Estimates program statistics for all states, counties, and school districts. They are produced for the U.S. Department of Education to use in their allocation formula for funding for Title I and related programs, totaling about $23 billion per year. 

These income and poverty statistics come from combining American Community Survey data with other data sources to provide single-year statistics for school districts, in addition to counties and states.  Because the survey data are combined with other data sources, the estimates are referred to as “model-based.”  In contrast, the 2008-2012 American Community Survey (due to be released next week) uses survey responses that were collected between January 2008 and December 2012. 

Standard American Community Survey products gather strength by aggregating information over one, three or five years. However, model-based estimates aggregate data from different sources, aligned along similar time frames, rather than from different years.

The 2012 small area income and poverty estimates use American Community Survey responses from one year (in this case, responses collected between January 2012 and December 2012) and combines them with the Census Bureau’s population estimates, decennial census, and administrative records (such as aggregated federal tax information and Supplemental Nutrition Assistance Program participation records). This provides increased precision over what is possible with direct estimates alone. Currently these are the most timely snapshot of poverty available for selected age groups for small areas.

A detailed, visual tutorial of the methodology is available on the Small Area Income and Poverty Estimates program website.  In addition, to visualize these data over time, you can examine the heat map, which shows annual poverty rates for all children ages 5-17 in families from 1999 to 2011.  You can also create your own tables and maps for export, or explore time series trends using the interactive tool.

In the mid-2000s, the Census Bureau started a sister program called Small Area Health Insurance Estimates . The Census Bureau is continuing to research additional applications for model-based estimates and to take greater advantage of data already available to provide even more current and reliable estimates for use in governmental programs.

Lucinda Dalzell, Chief of the Small Area Estimates Branch

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