Question of ACS 5 year Income

Hi Gan,
The Census Bureau adjusts monetary data in the ACS for inflation because the data are collected over a series of time (over a 12-month period for the single-year data or over a 60-month period for the five-year data). This adjustment is described in Appendix 5 of their ACS Handbook (www.census.gov/.../ACSGeneralHandbook.pdf)

"ACS income values are reported based on the amount of income received during the 12 months preceding the interview month. This is the income reference period. Since there are 12 different income reference periods throughout an interview year, 12 different income inflation adjustments are made. Monthly CPIU-RSs are used to inflation-adjust the 12 reference period incomes to a single reference period of January through December of the interview year. Note that there are no inflation adjustments for single-year estimates of rent, home value, or energy cost values."

I hope this helps.

Hi Gan,

My understanding is that the summary tables are already adjusted into 2014 dollars. I'm assuming they would have to use the same adjustments that users have to use when working with PUMS data, if you wanted to create your own tables not published in the summary tables.

The variables in PUMS are ADJHSG for any housing-unit variables and ADJINC for any income related variables. The adjustment factor is based on the year the respondent filled out the survey. Here's ADJINC from the PUMS 2010-2014 5-year Data Dictionary:

Adjustment factor for income and earnings dollar amounts (6 implied decimal places)
1094136 .2010 factor (1.007624 * 1.08585701)
1071861 .2011 factor (1.018237 * 1.05266344)
1041654 .2012 factor (1.010207 * 1.03112956)
1024037 .2013 factor (1.007549 * 1.01636470)
1008425 .2014 factor (1.008425 * 1.00000000)

The adjustments wouldn't be based on how much the earnings are (it doesn't matter if it's $200,000 or more or not), but rather the year in which the data was collected from the field.

Not sure if this helps.
-Diana

Thanks a lot Mark, it really helps!

Hi Diana, thank you so much for the detailed information. It's definitely helpful.