Poverty Definition

The following information is from Small Area Income & Poverty Estimates (SAIPE).

Model-Based SAIPE for School Districts, Counties, and States

The U.S. Census Bureau, with support from other federal agencies, created the SAIPE program to provide more current estimates of selected income and poverty statistics than those from the most recent decennial census.

Estimates are created for school districts, counties and states. The main objective of this program is to provide updated estimates of income and poverty statistics for the administration of federal programs and the allocation of federal funds to local jurisdictions. Estimates for 2010 were released in November 2011. These estimates combine data from administrative records, intercensal population estimates and the decennial census with direct estimates from the American Community Survey (ACS) to provide consistent and reliable single-year estimates. These model-based single-year estimates are more reflective of current conditions than multi-year survey estimates.

The SAIPE program produces single-year estimates of median household income and poverty for states and all counties, as well as population and poverty estimates for school districts. Since SAIPE estimates combine ACS data with administrative and other data, SAIPE estimates generally have lower variance than ACS estimates but are released later because they incorporate ACS data in the models. For counties and school districts, particularly those with populations below 65,000, the SAIPE program provides the most accurate subnational estimates of poverty. For counties, SAIPE generally provides the best single year estimates of median household income.

The main objective of this program is to provide updated estimates of income and poverty statistics for the administration of federal programs and the allocation of federal funds to local jurisdictions. Beginning with the estimates for 2005, data from the ACS are used in the estimation procedure; all prior year estimates used data from the CPS ASEC. Estimates are produced annually.

The SAIPE program "borrows strength" from multiple data sources, including administrative records and multiple household surveys, to produce estimates with lower variance than estimates from any one source, but they are available a year later than the annual estimates from the CPS ASEC. The SAIPE program uses statistical methods to improve subnational estimates of income and poverty by using information from a variety of sources, including current surveys, population estimates and administrative records such as aggregate food stamps and aggregate adjusted gross income from tax returns. Although used for critical purposes, such as in the funding formula that is used to distribute about $14 billion a year to school districts under the U.S. Department of Education’s Title I Program, such information is provided only as a characteristic of a specific geographic area. A significant advantage of household surveys is their ability to allow analysis of how income varies along with other household and individual characteristics, such as nativity and work experience.