The Effects of Integrating the U.S. Census Bureau's Small Area Income and Poverty Estimates Into the Appalachian Regional Commission's Designation of Economically Distressed Counties

Abstract

The Appalachian Regional Commission (ARC) has used the “distressed county” designation to identify counties with the most structurally disadvantaged economies. The ARC annually updates distressed status of counties with current unemployment and per capita market income data. This research evaluates the potential impact of incorporating the U.S. Census Bureau Small Area Income and Poverty Estimates (SAIPE) into the ARC distressed county designation. The distressed status accuracy results from the end of the 1980s and the magnitude and causes of distressed status transitions in the early 1990s indicate that using the SAIPE would alter the distressed designation but not to a radical degree. However, combining the SAIPE point estimate and the SAIPE upper bound estimate in the determination of distressed status would achieve the objective of using more current estimates of poverty while reducing the negative consequences of using an estimate of poverty with greater statistical variation than decennial census-derived estimates.