Rationale for making comparisons using non-overlapping periods

There are the following statements in the document https://www.census.gov/content/dam/Census/library/publications/2018/acs/acs_general_handbook_2018.pdf:

"TIP: As shown in Figure 3.1, consecutive 5-year estimates
contain 4 years of overlapping coverage (for
example, the 2010–2014 ACS 5-year estimates share
sample data from 2011 through 2014 with the 2011–
2015 ACS 5-year estimates). Because of this overlap,
users should use extreme caution in making comparisons
with consecutive years of multiyear estimates."

"TIP: In general, ACS 1-year data are more likely to
show year-to-year fluctuations, while consecutive
5-year estimates are more likely to show a smooth
trend, because 4 of the 5 years in the series overlap
from one year to the next.".

"When using ACS 1-year data, these comparisons are
generally straightforward. Using multiyear estimates to
look at trends for small populations can be challenging
because they rely on pooled data for 5 years. For
example, comparisons of 5-year estimates from 2010
to 2014 and 2011 to 2015 are unlikely to show much difference
because four of the years overlap; both sets of
estimates include the same data collected from 2011
through 2014. The Census Bureau suggests comparing 5-year estimates that do not overlap—for example, comparing
2006–2010 ACS 5-year estimates with 2011–2015
ACS 5-year estimates."

Diana and Todd Z--

The general ACS handbook does say that "these comparisons can be made with caution" (footnote 19 on p. 17 of https://www.census.gov/content/dam/Census/library/publications/2020/acs/acs_general_handbook_2020.pdf). I vaguely recall someone mentioning once that what you're basically getting is the difference between the last year of the more recent dataset and the first year of the earlier dataset (so 2014 vs 2019, in your example).

As Todd G noted, the usual significance tests don't work, but the Census Bureau used to provide a modification, which is multiplying the standard error of the difference by a factor that depends on the proportion of years that overlap. (Specifically, you subtract that proportion -- 4/5 = 0.8 in your example -- from 1 and take the square root.) I don't know if the Census Bureau is still publishing that guidance, but it does appear in the 2013-vintage ACS documentation (https://www2.census.gov/programs-surveys/acs/tech_docs/statistical_testing/2013StatisticalTesting3and5.pdf).

So it's doable, but I don't know whether it's desirable. You could easily imagine this being used as a "magic" way to make single-year comparisons for geographies without one-year estimates, but keep in mind:

• That modification to the usual significance tests is an approximation of an approximation (as I understand it). So there's more room for things to go awry.
• On average, the ACS samples about 2% of households each year. In a census tract with 2,000 total households, that's only ~40 households. So: even if a change over time were statistically significant, I would hesitate to draw any firm conclusions about change between two years, especially if I'm looking at subgroups (for example, renter households, or households with Black householders).

I'm looking forward to seeing other responses as well!

--Matt

Here's how I'd put it to a non-expert: 5-year estimates exist because that's the time required to collect a sufficient number of survey responses (particularly in small areas like census tracts, ZCTAs, or small towns). The 5-year estimates in small areas generally already have high margins of error. Given how few responses there are in five years, looking at only one year's worth of responses would give you very unreliable data. And (as you articulated), when comparing overlapping estimates, you're effectively comparing only the non-overlapping years.

For larger areas (states, CBSAs, big cities, big counties), you could just use the 1-year estimates; the reason you'd use the 5-year estimates is for their lower margins of error. By comparing overlapping years, you lose that advantage.

tl;dr: There's a reason they're 5-year estimates!

A colleague suggested looking at this paper (https://www.census.gov/library/working-papers/2012/adrm/rrs2012-03.html).  There's a short discussion about non-overlapping periods in section 4.4 on page 9.