An Evaluation of Small Area Estimates of Household Income

Thomas G. Exter, MapInfo Corporation
Lew Jean C. King, King Business Associates

Etimates of household income weigh heavily in business decisions involving local consumer markets. The authors used the Home Mortgage Disclosure Act (HMDA) mortgage reporting data as one input into a small area income estimation model. This input data and the final household income estimates are compared to Census 2000 income results. The authors draw on the growing literature relative to evaluating small area estimates and use various measures for comparing two or more sets of spatial attribute data. Relatively high variability was expected between the income estimates developed from demographic estimating techniques and census data. The paper discusses this variability in terms of magnitude and direction, comparative measures and measurement issues, and the general significance of factors affecting the validity and accuracy of census data as well as the estimate data. The objective of this paper is to evaluate household income estimates with an eye to improving estimation techniques.