Income Data for Policy Analysis: A Comparative Assessment of Eight Surveys. Purpose and need for the study

12/23/2008

Income is a critical variable in policy-related analyses. Many public programs are designed to address the consequences of inadequate resources. Others address needs that are conditioned by or correlated with low income. Consequently, income, together with poverty status, often plays a key role in the development of public policy. For these reasons, most federal household surveys collect at least some data on income and provide measures of poverty status. Yet income is exceedingly difficult to measure well in household surveys, and poverty status depends not only on the quality of measured income but on how a family is defined, which differs across surveys. Despite many similarities, there are also many differences in the income and poverty concepts used in major federal and federally-sponsored surveys, and different surveys provide markedly differing estimates of income and poverty.

Under contract to the Office of the Assistant Secretary for Planning and Evaluation (ASPE), Department of Health and Human Services (HHS), Mathematica Policy Research, Inc. (MPR) and its subcontractor, Denmead Services & Consulting, have conducted a comprehensive and systematic assessment of the income data and their utility for policy-related analyses in eight major surveys: the Survey of Income and Program Participation (SIPP); the Annual Social and Economic (ASEC) Supplement to the Current Population Survey (CPS); the American Community Survey (ACS); the Household Component of the Medical Expenditure Panel Survey (MEPS); the National Health Interview Survey (NHIS); the Medicare Current Beneficiary Survey Cost and Use files (MCBS); the Health and Retirement Study (HRS); and the Panel Study of Income Dynamics (PSID). This assessment extends the work of the HHS Data Council, which is summarized in the HHS working paper, “Measuring Income on Surveys:  Content and Quality:  An Overview.”

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