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8. Methodology and Assumptions
Data
This study uses the one percent Public Use Microdata Area (PUMS) from the 2005-2007 American Community Survey (ACS). The 2005-2007 ACS three-year dataset is based on data collected between January 2005 and December 2007. The three-year ACS data are grouped into geographic units known as PUMAs, or Public Use Microsample Areas. Each PUMA contains a minimum population threshold of 20,000[1]. Compared to the one-year dataset, the three-year dataset has a larger sample size and a smaller geographic unit in terms of number population. The minimum geographic unit in the ACS one-year dataset has a population of 65,000.
The sample unit for this study is the household, including non-relatives (such as unmarried partners, foster children, boarders) and their income. Individuals were therefore grouped into households. In Oregon, about 70% of households of two or more persons are “family” households, i.e., all household members are related by birth, marriage, or adoption. For this reason, we use the term family and household interchangeably. Regardless of household composition, it is assumed that all members of the household share income and expenses.
The 2008 Oregon Self-Sufficiency Standard (SSS), which was developed by University of Washington, was used to fulfill the goals of this study. The 2008 SSS numbers were deflated to 2005, 2006 and 2007 levels using a deflation factor calculated from the Bureau of Labor Statistics consumer price index (CPI) for All Urban Consumer Items in the corresponding years.
The ACS data are broken down by PUMAs and the SSS is broken down by counties and sub-regions relative to Housing and Urban Development (HUD) Metropolitan Statistical Areas (MSAs). The county/sub-area specific SSS could not be applied directly to 7 of the 27 Oregon PUMAs because there are multiple counties in each of those PUMAs. As a result, for those PUMAs consisting of multiple counties, each county was weighted by population and a weighted average of the SSS for those counties was calculated to determine the SSS specific to that PUMA. The unweighted SSS was applied to those PUMAs consisting of only one county or sub-county area.
Since the SSS assumes that adult household members work, the population sample in this report includes only those households in which there is at least one adult aged 18-65 who is not disabled. In other words, this report excludes disabled/elderly adults and their income from the sample when we determine household composition and household income. We also do not include group quarters in our analysis. Based on the characteristics described here, 1,008,354 households in total (non-disabled, non-elderly) were included in this demographic study of Oregon State.
The SSS for Oregon State had been calculated for 152 different family types in each county, including combinations of up to three or more adults and/or four or more children. The standards were developed by University of Washington.
Assumptions for Expanded Family Types
Two and Three or More Adult Families
In order to remain consistent with the Standard’s methodology, we assume that all adults in one- and two-adult households are working. In Oregon, 70% of households with one or more adults have all adults working, 25% have at least one but not all adults working, and about 5% contain no working adults.
Working adults are those who are employed at work or employed but absent from work during the week preceding the survey, as well as people in the Armed Forces. Non-working adults include those who are unemployed and looking for work and those who are not in the labor force because they are retired, in school, or for some other reason.) Therefore, work-related costs (transportation, taxes, and child care) are included for these adults in the household’s Standard.
Other assumptions
- For households with more than two adults, it is assumed that all adults beyond two are non-working dependents of the first two working adults. The main effect of this assumption is that costs for these adults do not include transportation.
- As in the original Standard calculations, it is assumed that adults and children do not share the same bedroom and that there are no more than two children per bedroom. When there are three or more adults in a household, it is assumed that there are no more than two adults per bedroom.
- Food costs for additional adults (greater than two) are calculated using the assumption that the third adult is a female and the fourth adult is a male, with the applicable food costs added for each.
- The additional adults are treated as adults for tax exemptions and credits, but the first two adults are assumed to be a married couple and taxes are calculated for the whole household together (i.e., as a family).
- For the additional children in the two- and -three adult families, the added costs of food, health care, and child care are based on the ages of the “extra” children and added to the total expenses of the household (before taxes and tax credits are calculated).
Self-Sufficiency Standard
The total income of each person in the household (excluding seniors and disabled adults’ income) was summed to determine the household’s total income. Income includes money received during the preceding year of the survey by non-disabled/non-elderly adult household members (or children) from wages; net income from farm and non-farm self-employment; Social Security or railroad payments; interest on savings or bonds; dividends, income from estates or trusts, and net rental income; veterans’ payments or unemployment and workmen’s compensations; private pensions or government employee pensions; alimony and child support; regular contributions from people not living in the household; and other periodic income. We assume that all income in a household is equally available to pay all expenses. A ratio of each household’s total income to the applicable Standard was calculated to determine the level of income adequacy.
The study also calculated a ratio of each household’s total income to the appropriate poverty threshold in 2005, 2006, and 2007 published by the U.S. Census Bureau. Although these thresholds are based on family size and number of related children, we use household size and the number of all children in the household to determine the appropriate poverty threshold for each household. Households whose total income falls below their threshold are considered “below poverty”.
