Now that the Census Bureau has congressional approval to begin the full ACS, data collection will begin in November 2004. The ACS test survey of a sample of 800,000 housing units, which has been conducted since 2000, will end in December 2004. The Bureau has been using this survey, known as the ACS Supplementary Survey, to test procedures and to produce annual data for geographic areas with populations of 250,000 or more. As one part of the test program, the supplementary survey data for 2000 have been compared with corresponding data from the 2000 Census long form to evaluate the quality of the ACS data and to provide users with information to make the transition from the long-form data to the full ACS data. According to the plan the Congress approved, the first annual ACS data for geographic areas with populations larger than 65,000 will be published beginning in 2006 with data for 2005; 3-year averages for geographic areas with populations between 20,000 and 65,000 will begin in 2008; and 5-year averages for geographic areas with populations smaller than 20,000, including Census tracts and block groups, will begin in 2010. The 5-year averages for 2008–12 will replace the 2010 Decennial Census long form for small geographic areas; they will be published in 2013 and will incorporate population and housing characteristics data from the 2010 Decennial Census short form. In replacing the long form, the ACS will provide the same long-form data items at the same level of geographic area detail but in a more timely way. Whereas the long form provided small geographic detail once a decade, the ACS will provide annual estimates for large geographic areas and estimates for smaller areas in terms of 3-year or 5-year averages; the 5-year averages will provide data at the same geographic area level as the long form. According to the Census Bureau, these 5-year averages will be about as accurate as the long-form data; the annual and 3-year averages will be significantly less reliable than the long-form data but more reliable than existing annual household surveys the Census Bureau conducts. In the remainder of the Background section of this report, we briefly describe the major differences between the ACS and the Decennial Census long form. We also discuss the Census Bureau’s outreach program, designed to involve stakeholders and users in shaping the ACS. Appendix III provides additional background information on the evolution of the ACS plan, appendix IV on the ACS testing and measurement program. Appendix II describes recent NAS findings on Continuous Measurement (CM) and the ACS. The 2000 Census long form used a decennial sample of about 19 million housing units; the full ACS will use an annual sample of 3 million housing units. In order to provide reliable estimates for geographic areas with populations of 65,000 or less, monthly ACS responses will be cumulated over several years—3 years for places with populations of 20,000 to 65,000 and 5 years for places with populations smaller than 20,000. Because of the statistical properties of these averages and users’ unfamiliarity with them, the Census Bureau has long recognized the need to provide guidance on such topics as the reliability of the averages for areas with rapidly changing population and the use of multiple estimates for states and other, larger geographic areas. For the 2000 Decennial Census, the ACS test programs, and federal household surveys, including the Current Population Survey (CPS), seasonal residents are recorded in a geographic area according to a concept of usual residence. As we noted above, under this concept, people who spend their winter in Florida and the rest of the year in New Hampshire, for example, are recorded as residents of New Hampshire; college students living away from home in dormitories are recorded as residents of the college. For the full ACS, the Census Bureau has announced its decision to change the concept to current residence. According to the Census Bureau, although each concept requires that a person have only one residence at any point in time, current residence recognizes that the place of residence does not have to be the same throughout a year, allowing ACS data to more closely reflect the actual characteristics of each area. The Census Bureau plans to use current residence because the ACS is conducted every month and produces annual averages rather than point-in-time estimates, unlike the Decennial Census. Current residence is uniquely suited to the ACS, because it continuously collects information from independent monthly samples throughout all months of all years. Because the ACS is designed to produce a continuous measure of the characteristics of states, counties, and other places every year, the new residence rules were needed for seasonal and migratory individuals. The underlying population and housing characteristics data for the 2000 Census long form were for April 1, 2000. For the ACS test program, the underlying population and housing characteristics varied. For all years except 2000, they were for July 1; for 2000, they were for April 1. For the full ACS, because the data are collected monthly, the reference period will be the average for the year, and the Census Bureau will assume this average is equivalent to data for July 1. The ACS will use population characteristics (age, sex, race, and ethnicity) and housing characteristics (occupied and vacant units) derived from an independent source and not from the results collected in the survey. Using independent controls for these characteristics is standard practice to correct sample survey results for the effects of nonresponse and undercoverage. Population and housing characteristics from the 2000 Census short form were used as independent controls for the 2000 Census long form, down to the tract level. For the ACS supplementary surveys, independent controls were from ICPE, which uses Decennial Census short-form data as benchmarks and administrative record data to interpolate between and extrapolate from the census benchmarks. ICPE develops and disseminates annual estimates of the total population and the distribution by age, sex, race, and Hispanic origin for the nation, state, counties, and functioning government units. ICPE provides annual estimates of population and housing characteristics at the county level, and for some subcounty levels, as of July 1, using the usual residence concept for seasonal residents. According to current Census Bureau plans, annual estimates of dollar- denominated data items, such as income, rent, and housing-related expenses, will be presented after adjustment for inflation in order to facilitate comparisons over time. As in the ACS test programs, only annual estimates with this adjustment will be presented. The Census Bureau also has decided to continue to adjust annual data collected each month in the ACS to a calendar year basis. It will be using the Consumer Price Index (CPI) for the annual and monthly adjustments for all geographic areas. The long form and ACS will also differ in how operations are conducted, such as nonresponse follow-up and data capture. For the 2000 Census long form, nonresponse follow-up was conducted for all nonrespondents. For the ACS supplementary surveys and for the full ACS, nonresponse follow- up will be conducted for a sample of one-third of all nonrespondents. For the 2000 Census long form, all data items were entered using automated optical character recognition procedure; data from the ACS will be manually keyed. The ACS supplementary surveys excluded persons living in group quarters. Group quarters—which include nursing homes, prisons, college dormitories, military barracks, institutions for juveniles, and emergency and transitional shelters for the homeless—accounted for roughly 2.8 percent of the population in 2000. The Census Bureau decided not to cover these persons in the supplementary surveys, to avoid duplication with the 2000 Census, and because it lacked funding to cover them in subsequent years. Procedures for including in the ACS persons living in group quarters beginning with 2005 are discussed in the Census Bureau’s ACS Operations Plan, issued in March 2003. In addition, it has announced that it intends to continue testing procedures to improve the mailing list for group quarters to be used for the 2010 Decennial Census. The Census Bureau has long recognized the need to seek input from stakeholders and users in making decisions for all its programs. The Census Bureau sponsors technical reports that NAS prepares. (In appendix II, we summarize recent NAS reports on the ACS and related decennial censuses.) The Census Bureau has also held conferences on the ACS and has contracted with Westat Inc. to organize two conferences of experts on specific aspects of the ACS. Additionally, the Census Advisory Committees, which are Census Bureau–appointed advisory committees whose members represent professional associations such as the American Statistical Association (ASA) and the American Marketing Association, meet twice a year. The Census Bureau and other federal statistical agencies also participate in the quarterly meetings of the Council of Professional Associations on Federal Statistics, whose members include professional associations, businesses, research institutes, and others interested in federal statistics. To obtain input from other federal agencies, the Office of Management and Budget (OMB) established an interagency advisory committee for the ACS in 2000. The committee’s major purpose was to coordinate the review of questions to be included in the ACS. Because of the committee’s limited focus, the Census Bureau established the ACS Federal Agency Information Program in 2003, responding to a recommendation we made. This program is designed to assist each federal agency that has a current or potential use for ACS data to achieve a smooth transition to using the ACS. From its beginnings in the mid-1990s, the Census Bureau’s development plan for the ACS was designed to ensure that the ACS would satisfactorily replace the Decennial Census long form as the major source of small geographic area data. In our review of the plan, we found that the Census Bureau, as well as key ACS stakeholders, had for many years identified the key issues that needed to be resolved if the ACS were to reach this goal.