Bureau Of The Census Methods For Estimating Per Capita Income For Small Local Governments As Used In General Revenue Sharing PDF Download

An adaptation of the James-Stein estimator is applied to sample estimates of income for small places (i.e population under 1000) from the 1970 Census of Population and Housing. The adaptation incorporates linear regression in the context of unequal variances. Evidence is presented that the resulting estimates have smaller average error than the sample estimates or an alternative procedure of using the county averages. The new estimates for these small places now form the basis for the Census Bureau's updated estimates of per capita income for the Revenue Sharing Program.