We are trying to calculate the difference in median annual income at the county level between those who are high school graduates vs. those who are less than high school graduates. There are both 1 year and 5 year estimates from the ACS available. The goal is to provide a yearly estimate of the difference in income between the two groups (e.g., “in 2013, the annual difference in median income between high school graduates and those with less than a high school education was $X”). With 1 Year estimates, we could make a statement like that. With 5 year estimates, the statement would have to be more like, “in 2013-2017, the annual difference in median income between high school graduates and those with less than a high school education was $X”.
Understanding that the 5 year estimates are more reliable because the samples are larger and also have smaller margins of error, what would be the better source to calculate the difference by year (i.e., 2013, 2014)? The 1 year estimates are exactly that, even though the margins of error are larger. The 5 year estimates share overlapping years, so they are not a true indicator of the difference in a single year. Since we are looking at county level data, the 1 year estimates include a large sample size, but in comparing the 1 Year and 5 Year data, the actual median values are not wildly different, but the margins of error are very different. Even though we would ideally like to make a statement about differences by year, would it be better to use the 5 year estimates since they are more reliable?