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June 2006

Income data quality issues in the CPS

Daniel H. Weinberg

The Annual Social and Economic Supplement to the Current Population Survey (CPS ASEC) measures income and poverty in the United States. Based on comparisons to the National Income and Product Accounts, researchers suggest that income is underreported on the CPS ASEC, thus the estimated poverty rate is too high. This article focuses on the quality of the CPS ASEC. A close look into the questionnaire design, data collection and preparation, and postcollection data processing suggests areas for improvement. The article proposes a set of research projects that could be used to remedy many of the deficiencies identified and encourage discussion among interested researchers.

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