By Panel on Formula Allocations, Committee on National Statistics, National Research Council, Thomas B. Jabine, Thomas A. Louis, Allen L. Schirm

The workshop used to be an instantaneous outgrowth of a prior examine through the CNSTAT Panel on Estimates of Poverty for Small Geographic components. That panel, tested less than a 1994 act of Congress, begun its paintings with a truly particular venture: to guage the suitability of the U.S. Census Bureau's small-area estimates of terrible school-age young ones to be used within the allocation of cash to counties and faculty districts lower than identify I of the hassle-free and Secondary schooling Act.

In conducting their project, panel individuals got here to achieve that the homes of information resources and statistical tactics used to provide formulation estimates, interacting with formulation positive aspects akin to thresholds and hold-harmless provisions, can produce effects that will not were expected or meant. It additionally turned obvious that there's a trade-off among the targets of offering a cheap quantity of balance in investment from three hundred and sixty five days to the subsequent and redirecting money to various jurisdictions as real wishes swap. in a single example, for instance, the once a year appropriation incorporated a one hundred pc hold-harmless provision, making sure that no recipient could obtain under the 12 months earlier than. even though, there has been no elevate within the overall appropriation, with the end result that new estimates displaying adjustments within the distribution of software wishes throughout components had no impression at the allocations.

Choosing the fitting Formula offers an account of the shows and discussions on the workshop. the 1st 3 chapters hide the assessment, case experiences, and methodological classes, respectively. bankruptcy four summarizes the problems mentioned within the roundtable and concluding periods, with emphasis at the identity of questions that will be addressed in a panel study.

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Within each state, the resulting county estimates were benchmarked to state estimates based on a separate model. Three methods were used to evaluate the SAIPE Program county estimates. S. Census Bureau and several alternative models were examined to determine to what degree the results were consistent with modeling assumptions. S. Census Bureau model and some of the alternative models were used to prepare estimates for 1990, using inputs based on the 1980 census and appropriate data from the CPS, the IRS, and the Food Stamp Program.

Census Bureau’s SAIPE Program staff and panel members and staff. S. Census Bureau showed overestimation of the number of poor children in counties that had a high proportion of the population living in group quarters. This bias was substantially reduced in the revised 1993 estimates by changing one of the independent variables in the model from population under 21 to population under 18. S. Census Bureau was a good choice. Nevertheless, the estimates are subject to appreciable error. The comparison of model-based county estimates for 1989 with the decennial census numbers showed an average absolute difference of about 15 percent for numbers of poor children and average absolute proportional differences of 15 percent for numbers of poor children and 16 percent for proportions of poor children.

The formula does not recognize other programs that support substance abuse services. Also, the need estimates are for the entire state population, despite the reality that most block grant funds are spent on services for the poor and the uninsured. • The statistics used to improve the formula elements would be more useful if there were less clustering in the sample and if more geographic detail could be made available to the researchers. • The NHSDA, as a household survey, does not cover prisoners and the homeless, population groups that have a higher than average probabil- 28 CHOOSING THE RIGHT FORMULA: INITIAL REPORT ity of dependence.

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