Estimating the Number of People in Poverty for the Program Access Index: The American Community Survey vs. the Current Population Survey

The Program Access Index (PAI) is one of the measures the Food and Nutrition Service (FNS) uses to reward States for high performance in the administration of the Food Stamp Program. The PAI offers an indication of the degree to which low-income people have access to food stamp benefits. It is calculated as the ratio of the average monthly number of food stamp participants to the number of people with income below a percentage of poverty in each State. Each year, FNS distributes $12 million among the four States with the highest PAI and the four States with the largest improvement from the previous year.

FNS currently uses estimates of the size of the poverty population derived from the Annual Social and Economic Supplement to the Current Population Survey (CPS) fielded each March. While the CPS provides a representative sample for each State, the household samples in many States are relatively small, and the Census Bureau recommends use of 3-year averages for Stateto-State comparisons and 2-year averages for year-to-year changes. The statute authorizing performance awards, however, requires that each award reflect performance in the previous fiscal year and so precludes use of a combined average across years. The calculation of the PAI, therefore, is based on the sample from a single CPS each year. This reduces the precision and increases the variability of the State estimates.

The American Community Survey (ACS) is a new survey administered by the Census Bureau, replacing the long-form questionnaire from the Decennial Census. Starting this year, data will be available annually for all areas with populations of 65,000 or more. In the United States and Puerto Rico, about 250,000 addresses per month, or 2.5 percent of the population per year, will receive the survey. This is equal to about 1-in-40 addresses a year, providing State samples that are substantially larger than those in the CPS.

In the proposed and final rulemaking that established the performance awards, FNS noted that we were considering use of the ACS in place of the CPS because of its larger sample, but that we needed to examine these relatively new data more carefully, and reserved the right to use new and better data for the calculation of the PAI should it become available. This paper presents a comparison of the two surveys as a source of data for the PAI calculation and illustrates the potential effects of moving to the ACS.